For the purposes of Capital Gains Tax, a chargeable gain is the:

• A. difference between purchase price and sale price (less allowable costs)
• B. difference between the expenditure incurred when selling an asset and purchasing a new asset.
• C. allowable deduction on a chargeable item.
• D. incidental expenditure arising for the sale of an asset.

Answer: (A)

In Capital Gains Tax, the chargeable gain is the net profit you realize on disposing of an asset. It’s calculated as the disposal proceeds minus the cost base, where the cost base is what you paid to acquire the asset plus allowable costs of buying and selling. Put simply, it’s the difference between the sale price and the purchase price, with allowable costs deducted. This aligns with the idea of taking the sale proceeds, subtracting what you originally paid, and then accounting for the allowable costs. The other descriptions refer to related concepts or partial aspects (such as a new asset reinvestment, a general deduction, or only selling costs) rather than the full calculation of the gain.