What is Capital Gains Tax?

Capital gains tax is a type of income tax which is payable on your taxable capital gains.

In the previous topic we learned what “capital” means and what it means when we refer to a capital asset. When you sell a capital asset for a profit, a capital gain arises which may then be subject to capital gains tax.

In the following topic we will learn how to calculate your taxable capital gains but for now we point out the taxable capital gains are a specific inclusion in your taxable income, because although they do not fall under the definition of gross income, taxable capital gains must be included in your taxable income.