The Finance Act 1965 (c. 25) is an act of the

Parliament of the United Kingdom The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body of the United Kingdom, and may also legislate for the Crown Dependencies and the British Overseas Territories. It meets at the Palace ...

which introduced two major new UK taxes.

Corporation tax A corporate tax, also called corporation tax or company tax or corporate income tax, is a type of direct tax levied on the income or capital of corporations and other similar legal entities. The tax is usually imposed at the national level, but i ...

created a separate system for taxing the income of corporations, where previously they had paid

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

in the same way as private individuals.

Capital gains tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. In South Africa, capital g ...

is charged on the disposal of assets, and is based on any "real gain" made from the disposal. If the income comes within income tax, capital gains is not chargeable. Capital gains tax does not apply to corporations, but an identical provision, known as chargeable gains, is included in corporation tax. It was criticised by the founders of the

Institute for Fiscal Studies The Institute for Fiscal Studies (IFS) is an independent economic research institute based in London, United Kingdom, which specialises in UK taxation and public policy. It produces both academic and policy-related findings. The institute's ...

References

* United Kingdom Acts of Parliament 1965 Tax legislation in the United Kingdom {{UK-statute-stub

See also

References