Definition of capital assets

Something such as land, buildings, or machinery used by a business to produce its goods or services an asset on which capital gains tax must be paid if it is sold. [1]

Originally, the term meant fixed assets such as land, buildings and machinery, and other assets held for the long term and unlikely to be turned into cash for the operation of a business. However, the term is increasingly used (including by tax authorities) to encompass other assets such as stocks. [2]

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