DEFINITION of 'Chargeable Gain'

A British term for the increase in an asset's value between the time it is purchased and the time it is sold, which becomes subject to capital gains tax. Chargeable gains can often be offset by chargeable losses. U.K. taxpayers are also allowed reduce chargeable gains by taking inflation into account (this is known as the "indexation allowance").

BREAKING DOWN 'Chargeable Gain'

Certain expenses associated with buying, selling or improving the asset, such as fees or commissions, may be deducted from the amount of the chargeable gain. For example, if a British corporation sells an office, land or securities it owns at a profit, HM Revenue and Customs (the U.K. equivalent of the IRS) categorizes the event as a chargeable gain.

"Chargeable gain" can be thought of as being equivalent to "capital gain" in meaning to the U.S. term.

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