Capital Gains Tax is a tax on:

• A. Income from employment
• B. Tax on VAT
• C. Stamp duty
• D. Profit on disposal of an asset that increased in value

Answer: (D)

Capital Gains Tax targets the profit you make when you dispose of a chargeable asset that has risen in value. It’s not a tax on income from employment (that’s income tax), not a VAT on goods or services, and not stamp duty (which is charged on certain transactions like property transfers). The gain is calculated as the disposal proceeds minus allowable costs and reliefs, and CGT applies to the resulting profit after any exemptions.