"for individuals, the amount chargeable to capital gain tax could be added on to the income liable tax and charged to CGT at the individual's marginal tax rate. In the UK, a rate of 10% or 20% has applied to capital gains above the allowance, depending on the level of taxable income." question(true or false) chargeable gains made by individual are taxed at their marginal tax rate. Answer is false. why is it false? could you please explain what the meaning of the first sentence in the text is in other words?
I think the issue here is the difference between the generic core reading sentence and the UK situation. The core reading states generically for individuals, the amount chargeable to capital gain tax could be added on to the income liable tax and charged to CGT at the individual's marginal tax rate This is true in some countries, and used to be true in the UK. If you paid a marginal rate of income tax of (say) 45% and you made a chargeable gain, then you paid 45% on that chargeable gain. In the UK now it is NOT the marginal rate that applies. The rates are 10% and 20% (where income tax rates are 20%, 40% and 45%). This is what the second core reading sentence refers to. The question then asks whether gains are taxed at marginal rates, but doesnt specifically state whether the question refers to the UK or not. It should really state that that it is referring the the UK as the other parts of the question also refer to the UK situation. But the answer is false because it is referring to the UK and in the UK it is 10% and 20% rather than marginal rates.
