tax on difference between buying and selling price capital gains tax: a tax on the difference between the gross acquisition cost and the net proceeds when an asset is sold. In the United Kingdom, this tax also applies when assets are given or exchanged, although each person has an annual capital gains tax allowance that exempts gains within that tax year below a stated level. In addition, specific assets may be exempt, for example, a person's principal private residence and transfers of assets between spouses, and the tax may not be levied on the absolute gain. An adjustment is made for inflation and the length of time that the asset has been held. There are also concessions on the sale of a business at retirement.