What is the definition of capital gains tax in relation to leasehold properties?

Capital gains tax specifically relates to the profit realized from the sale of an asset, such as leasehold properties that have appreciated in value since the time of purchase. When a leasehold property is sold, if the sale price exceeds the original purchase price, the seller is required to pay tax on that profit, known as capital gains tax. This concept is crucial for investors and property owners, as it impacts their financial returns on real estate investments. The gain is calculated by determining the difference between what the property was sold for and what was initially invested in it, factoring in any allowable costs or improvements.

The other options refer to different types of taxation or fees that do not align with the concept of capital gains tax. For example, income derived from leasehold agreements reflects taxation on rental incomes rather than gains made from sales. Fees associated with the renewal of leasehold contracts and taxes on rental income address different aspects of property management, not the profits from property sales. Understanding these distinctions is important in leasehold management and tax planning.