Preliminary Announcement of Annual Results

CAPITAL GEARING TRUST p.l.c (the 'Company')

PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 5 APRIL
2008

Financial Highlights


                          5 April 2008 5 April 2007 % Change

Share Price                   2,135.0p     2,060.0p     +3.6
Net Asset Value per Share     2,126.4p     2,024.2p     +5.0
Premium/(Discount)                0.4%         1.8%        -
Shareholders' Funds             £59.4m       £56.6m     +5.0
Market Capitalisation           £59.7m       £57.6m     +3.6
Total Expense Ratio*              1.5%         1.5%        -
Dividend per Share               16.5p        14.0p    +17.9

* Operating Expenses divided by Total Assets less Current Liabilities


Chairman's Statement

Overview

I am pleased to report that Capital Gearing Trust's objective of
achieving capital growth in absolute terms has once again been met.

Against a background of turbulent world financial markets, I can
confirm that in the year to 5 April 2008, net asset value per share
increased by 5% from 2,024.2p to 2,126.4p.  Although this represents
a relatively modest increase, it has been achieved during a period
when the FTSE Equity Investment Instruments Index and the FTSE
All-Share Index fell by 4.4% and 8.9% respectively and the FTSE
Government All Stock Index rose by only 1.9%. Shareholders may be be
interested to note that since 1982, the share price has increased a
hundred fold reflecting the uninterrupted annual growth in assets
since that date.

Shareholders will know from previous reports that our Investment
Manager has for some time adopted a cautious investment policy and
this is reflected in the overall asset mix shown in the portfolio
analysis.  At the year end, fixed interest, index linked securities
and cash accounted for 60.1% of total assets with a further 11.4%
held in zero dividend preference shares and 7.3% in endowment funds.
Equity exposure was reduced during the year from 35.1% to 21.2%,
reflecting a reduction in private equity and property investment
trust weightings, and the exposure to index linked securities was
increased from 18.7% to 30.5%.

Earnings per share for the period amounted to 21.3p compared to 18.7p
in 2007.

Dividend

Last year, a total distribution of 14p was paid, made up of 12p plus
a special dividend of 2p. Subject to shareholder approval at the
Annual General Meeting ('AGM'), this year the Board recommend a total
distribution of 16.5p made up of 13.0p plus a special dividend of
3.5p. The special dividend continues to reflect the income generated
from the high bond content of the portfolio that might at some stage
be switched into lower yielding capital growth securities.

Continuation of the Company

As noted in my statement to you last year, the Board will honour its
long standing commitment to shareholders by offering them the
opportunity to realise their investment in the Company in or around
October this year and intend to do so again in 2015. Shareholders
will, in due course, receive documentation detailing a Share Sale and
Purchase Facility. Following notification by shareholders of required
actions, the Company's appointed broker will match sale and purchase
trades and, providing there is sufficient support, the Company will
continue in its present form thereafter. Should sufficient support
for continuation not be evident, the Board will make further
proposals to the shareholders in relation to the future of the
Company.

The Board acknowledge however that shareholders have the ability to
realise their investment at any time and, due to the premium at which
the shares trade in the market, also acknowledge that such
realisation may be at prices which are higher than that offered
within the Share Sale and Purchase Facility.

Annual General Meeting

This year, the AGM will be held in London on Friday 11 July 2008 at
12.30pm. Your Board would like to invite you to attend the AGM and I
look forward to welcoming you to the meeting. After the formal
business of the meeting has concluded, our Investment Manager will be
pleased to present his views on the market in general and the
Company's investment policy in particular.

Issuance and Repurchase of Shares

The Board operates an informal discount/premium control mechanism
whereby major market supply and demand imbalances are satisfied by
either the issuance of shares at a premium to net asset value or
buying back shares at a discount. At the last AGM shareholders
approved the necessary resolutions to enable these policies to be
renewed and although no change in the issued capital took place
during our last financial year, similar resolutions will again be put
forward at this year's AGM.

The Board

In accordance with good corporate governance practice, all Directors
will retire at the AGM and, being so eligible, offer themselves for
re-election. Mr Spiller will retire in accordance with the AIC Code
of Corporate Governance ('AIC Code') as he is not independent; Mr
Morton and myself retire in accordance with the AIC Code as we have
each served on the Board for nine years or more. Mr Meek retires by
rotation in accordance with the Articles of Association, having been
the longest standing Director since last appointment. Further details
in respect of each Directors' retirement, performance evaluation and
re-election are given in the Annual Report and Accounts.

A resolution to increase the aggregate limit on Directors' fees shall
be proposed to the AGM. Further details in respect of the reasoning
for the increase are given in the Annual Report and Accounts.

Regulatory Changes

Over the course of the last two years, various changes have been made
to the regulations which govern your Company. In order to ensure
compliance with the revised regulations and in particular
implementation of the Companies Act 2006, our advisers, in
conjunction with the Board, have carried out a thorough review of the
Company's current practice and constitutional documents. In line with
such, we have reviewed the Articles of Association and a revised
version will be proposed for approval at the forthcoming AGM, details
of which can be found in the Annual Report and Accounts. A further
revised version of the Articles is likely to be proposed for approval
at a later General Meeting to reflect additional changes due to be
implemented in October 2009.

VAT on Management Fees

I am pleased to note that the European Court of Justice ('ECJ') has
ruled on the period for which reclaims of VAT paid on management
expenses may be based. VAT claims may now include the period from 1
January 1990.  In September 2006, CG Asset Management ('CGAM')
submitted a protective claim to HM Revenue & Customs ('HMRC') on
behalf of the Company. Following the ruling by the ECJ in favour of
JP Morgan Claverhouse Investment Trust Plc, CGAM in January 2008 made
a further claim on behalf of the Company to HMRC. CGAM continue to
monitor the situation in respect of fulfilment of the claims by HMRC;
however it is expected that it may be some time before this occurs
and that any recovery, although welcomed, will not be material to the
financial results of the Company.

Outlook

In my interim report, I highlighted some of the major risks to
financial markets caused by the continuing weakness in the US housing
market, high levels of consumer debt and the excessive leverage of
many financial institutions. Markets are now experiencing the painful
consequences of the unwinding of these past excesses and investors'
already fragile appetite for risk is giving way to fear.  Leading
financial institutions are being forced to write-off billions of US$
losses linked to US sub prime lending and other structured credit and
leveraged loans and in many cases are now having to raise additional
capital to bolster much weakened balance sheets. Central Banks have
taken action to try to unfreeze credit markets by introducing fresh
liquidity in the US and to a lesser extent the UK, by aggressively
cutting interest rates leading to pronounced weakness in the US
Dollar and the British Pound against the Euro and Yen. It is,
however, unlikely that the steps taken by the Central Banks will in
isolation be enough to prevent a downturn in world economic growth,
particularly as emerging economies such as China and India are now
showing signs of over-heating. Meanwhile, consumers are being
squeezed by the combination of rising food and energy prices and the
more circumspect lending policies now being adopted by banks and
building societies.

In summary, we see no immediate reversal in the de-leveraging process
that is now beginning to take place. It is our intention therefore to
continue to maintain the cautious investment stance which during
difficult market conditions has enabled Capital Gearing Trust to
maintain its enviable record of producing over two decades of
uninterrupted asset growth.


Mr T R Pattison
Chairman
22 May 2008


Business Review and Principal Risks

A review of the year's activities and an indication of future  policy
are given  in  the  Chairman's  Statement  and  Investment  Manager's
Report. The principal risks and uncertainties facing the Company  are
detailed below and  in the  Notes to the  Financial Statements.   The
very nature  of forward  looking statements  involves uncertainty  as
events beyond the control of  the Company may affect actual  results.
Performance and  results  may therefore  differ  from the  plans  and
objectives of the  Company; the Company  takes no responsibility  for
matters outside of its control.

Investment Objective
The investment objective and policy are monitored to ensure continued
investor interest  and  for  consideration  of  continuation  of  the
Company in its present form. Investment performance is monitored  and
the Investment Manager presents  a report to  each Board meeting  for
consideration and discussion.

Premium/Discount Level
The Board regularly review the level of premium/discount and, in  the
event of prolonged trading at  a discount, consideration is given  to
enhancement strategies for  the share  price. The  Board operates  an
informal discount control  mechanism and  will buy in  shares as  and
when necessary to manage the discount at an appropriate level.

Stock Price
Uncertainty of future  stock prices  presents a risk  in relation  to
potential losses  on  market  positions held.  The  Board,  with  the
Investment Manager, considers asset allocation on a regular basis  to
minimise potential risks where possible.

Shareholder Register
The Board review all large  transactions and periodically consider  a
full shareholder  analysis. In  the  event of  activist  shareholders
being attracted  onto  the  Register,  the Board  would  be  able  to
consider quickly whether any action was required.

Other Risks
Risks associated  with the  Company's financial  instruments  include
Market Price, Interest Rate, Credit and Foreign Currency; information
relating to these is given in the Annual Report and Accounts.

Social, Community and Environmental Matters
The Company does not have any employees. The Company invests
primarily in closed ended and other collective investment vehicles
with the objective of achieving capital growth. The Board is of the
opinion that the underlying investee companies have policies to act
with due regard to community, welfare and environmental factors and
do not therefore intervene in these areas.

Political and Charitable Contributions
No contributions were made during the year for political or
charitable purposes (2007: nil).


Key Performance Indicators ('KPIs')

The Board monitors numerous KPI indices and ratios for the purpose of
assessing and reporting investment performance. The Chairman, in his
statement, has summarised performance of the Company's Net Asset
Value ('NAV') per Share for the year to 5 April 2008 and has compared
this year's capital growth (in absolute terms) against the FTSE
Equity Investment Instruments Index, the FTSE All-Share Index and the
FTSE Government All Stock Index. He also describes the earnings per
share and dividends paid for the year.

A graph showing the Company's NAV per Share compared with the FTSE
Equity Investment Instruments Index over the period from 1982 is
shown in the Annual Report and Accounts. A comparison of the
Company's share price total return over the last five years, compared
with the FTSE Equity Investment Instruments Index which reflects the
performance of similar companies, is also shown in the Annual Report
and Accounts.

In addition, the Board monitors the following additional KPIs:

  * Share price premium to NAV, an important measure of demand for
    the Company's shares and a key indicator of the need for shares
    to be bought back (if discount to NAV is high) or issued (if
    share price is at a premium to NAV). At the start of the year
    under review the premium to NAV was 1.8% compared with 0.4% at
    the year end.
  * Expense ratios, which enable the Board to measure the control of
    costs and help in meeting the dividend payment objective. The
    ratio of operating expenses to net assets continues to remain
    relatively stable at 1.5%.


Statement of Directors' Responsibilities

Company law requires the Directors to prepare financial statements
for each financial year which give a true and fair view of the state
of affairs of the Company and of the return of the Company for that
period and do not contain any untrue or misleading statements.  In
preparing such financial statements, the Directors are required to:

*          select suitable accounting policies and then apply them
  consistently;
*          make judgements and estimates that are reasonable and
  prudent;
*          state whether applicable accounting standards have been
  followed, subject to any material departures disclosed and
  explained in the financial statements; and
*          prepare the accounts on the going concern basis unless it
  is inappropriate to presume that the Company will continue in
  business.

The Directors confirm that they have complied with the above
requirements in preparing the financial statements.

The Directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the
financial statements comply with the Companies (Northern Ireland)
Order 1986.

The Directors are aware that they will be liable if:
i)          they knew any statement to be untrue or misleading or
were reckless as to whether any statement was untrue or
misleading; or
ii)          they knew any omission from the accounts was dishonest
concealment of a material fact.

The Directors are further responsible for ensuring that no omissions
are made from the financial statements which could be construed as
concealment of a material fact and for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.

The financial statements are published on
www.capitalgearingtrust.com, which is a website maintained by TMF
Corporate Secretarial Services Limited. The Directors are responsible
for the maintenance and integrity of the Company's corporate and
financial information included within the above website. The work
carried out by the Auditors does not involve consideration of these
matters and, accordingly, the Auditors accept no responsibility for
changes that may have occurred to the financial statements since they
were initially presented on the website. Legislation in the United
Kingdom governing the preparation and dissemination of the financial
statements may differ from legislation in other jurisdictions.

Investment Manager's Report

Review

The Net Asset Value ('NAV') per Share rose by 5.0% in the year,
modest in itself but perhaps acceptable in a year when the FTSE
All-Share Index fell by 8.9%.  Given our concerns over the imbalances
in the real and the financial world economy, the portfolio allocation
remained defensive throughout, with equity exposure balanced with
government bonds, both conventional and index-linked.  Most of the
latter were in Europe and Canada and proved, as hoped, to be
negatively correlated with equities.  As a result the volatility of
the asset value was very low.

The major changes in allocation were to reduce exposure to property
and to venture capital.  The holdings in the former area are now
mainly in residential in Japan and development in India.  In the
latter, all bar one of the private equity investments are now in
liquidating funds - the environment for reinvestment is assessed as
being poor.  In any case, the total exposure to this area was reduced
from about 7% to 2%.  Some investment was made in infrastructure at a
discount, though profits have been taken since the year end.  But the
largest change was to build up sizeable holdings in Swiss Francs and
Japanese Yen bonds.  Both these currencies move in inverse relation
to equity markets because they are used in the carry trade; more
importantly, both are good value.

It was a poor year for the investment trust market.  Not only did
discounts widen generally, but a large number of companies with
specific commitments to limit the discount on their shares failed to
keep their word.  Astonishingly, there were even new companies issued
with such assurances that were not adhered to in the event.  Quite
apart from consideration of the integrity of the boards involved,
this development is unhelpful to the future of the investment company
movement.  Growth can only be based on trust.

Nevertheless, there were some opportunities.  Resources Trust, for
instance, was in liquidation and tendered for 90% of its shares at
c.95% of asset value.  The Company tendered no shares, because the
asset value rose as a result of the tender.  The shares are now
suspended, but the Company should receive cash from the liquidator
that is roughly 30% greater than the tender offer.

Outlook

The severity of the hangover is proportionate to the length of the
party, and, notwithstanding the encouraging rally in equities at the
time of writing, the imbalances in the world economy built up over
the last 15 years have not been corrected.  What is credible is that
the problems associated specifically with the sub-prime mortgage
market in the US are now solved, at least in the banking system, by
the large amount of equity raised; for hedge funds, whose accounting
is less rigorous, there may still be problems yet to be disclosed.

That, however, does not address either the negligible savings rate
and excessive debt of the household sector in both the US and the UK
or the fragility of the financial system, even after the new equity
has been raised; leverage is still at dangerous levels, particularly
through the US$500 trillion derivative market.

To deal with the household sector first, the inevitable move for
private consumption from close to 72% of US GDP to a more sustainable
66% or 67% of GDP will clearly depress growth over the period when it
adjusts.  The credit tourniquet suggests that the adjustment should
start soon, but the speed of adjustment remains unclear.  If it can
be spread over an extended time, the financial markets may be able to
muddle through without great pain.  On the other hand, if the
adjustment in the real economy is rapid, as seems on balance more
likely, then the strain on corporate profits and on the stability of
the financial system may be severe.  In the latter case, more of the
extreme monetary measures recently undertaken by Central Banks can be
expected.

Against that background, the current asset allocation, with only
modest exposure to equities balanced by conventional and index-linked
bonds and low risk growth from the portfolio of zero coupon
preference shares and funds of endowment policies, seems
appropriate.  Opportunities in the investment trust market are better
than those of a year ago and there can be some confidence of
outperforming the underlying assets.

Despite a number of fund raisings in the property world, commercial
real estate still looks firmly in the grip of a bear market, with
significant downward pressure on rents still not fully reflected in
valuations.  Opportunities look better abroad.

Indeed, Sterling may well come under further pressure; in part,
because of house price weakness leading to poor retail sales, rising
unemployment (though this has yet to be seen) and consequently lower
interest rates; in part because Sterling is now observably tied to
the fortunes of financial services.  If troubles in the latter causes
weakness in the Pound, then both the Swiss Franc and the Yen should
be the major beneficiaries.


R P A Spiller
22 May 2008


Portfolio Analysis
Distribution of investment funds of £58,939,000 (2007: £56,200,000)

                                                        2008    2007

                  UK     North     Europe   Elsewhere   Total   Total
                         America
Investment           %         %        %           %       %       %
Trust assets:

    Ordinary      12.9       3.7      1.0         3.6    21.2    35.1
shares
    Endowment      7.3         -        -           -     7.3     6.5
funds
    Zero          11.4         -        -           -    11.4    17.6
dividend
preference
shares
Other assets:
    Fixed          2.3         -     17.7         2.7    22.7    16.0
interest
    Index          9.6       4.4     16.5           -    30.5    18.7
linked
    Cash           6.9         -        -           -     6.9     6.1
                  50.4       8.1     35.2         6.3     100     100


Income Statement
for the year ended 5 April 2008


+-------------------------------------------------------------------------------------------------------+
|                                       |    |       | |       | |    2008| |       | |       | |   2007|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|                                       |Note|Revenue| |Capital| |   Total| |Revenue| |Capital| |  Total|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|                                       |    |   £000| |   £000| |    £000| |   £000| |   £000| |   £000|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|                                       |    |       | |       | |        | |       | |       | |       |
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Net (losses)/ gains on investments     |    |      -| |   (14)| |    (14)| |      -| |  3,417| |  3,417|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Exchange gains/(losses)                |    |      -| |  3,008| |   3,008| |      -| |  (717)| |  (717)|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Investment income                      | 2  |  1,123| |      -| |   1,123| |    990| |      -| |    990|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|                                       |    |       | |       | |        | |       | |       | |       |
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Gross Return                           |    |  1,123| |  2,994| |   4,117| |    990| |  2,700| |  3,690|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Investment Management Fee              |    |  (159)| |  (370)| |   (529)| |  (164)| |  (383)| |  (547)|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Transaction costs                      |    |      -| |   (68)| |    (68)| |      -| |   (76)| |   (76)|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Other expenses                         |    |  (273)| |      -| |   (273)| |  (250)| |      -| |  (250)|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Net return on ordinary activities      |    |    691| |  2,556| |   3,247| |    576| |  2,241| |  2,817|
|before tax                             |    |       | |       | |        | |       | |       | |       |
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Tax on ordinary activities             | 3  |   (95)| |     95| |       -| |   (54)| |     54| |      -|
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|                                       |    |       | |       | |        | |       | |       | |       |
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Net return attributable to equity      |    |    596| |  2,651| |   3,247| |    522| |  2,295| |  2,817|
|shareholders                           |    |       | |       | |        | |       | |       | |       |
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|                                       |    |       | |       | |        | |       | |       | |       |
|---------------------------------------+----+-------+-+-------+-+--------+-+-------+-+-------+-+-------|
|Return per Ordinary Share              | 6  | 21.32p| | 94.85p| | 116.17p| | 18.68p| | 82.11p| |100.79p|
+-------------------------------------------------------------------------------------------------------+


The total column of this statement is the Income Statement of the
Company. The revenue return and capital return columns are
supplementary to this and are prepared under guidance issued by the
Association of Investment Companies.

All revenue and capital items in the above statement derive from
continuing operations.


Statement of Total Recognised Gains and Losses
for the year ended 5 April 2008


                                                2008    2007
                                                £000    £000

Net return attributable to equity shareholders 3,247   2,817


Total gains and losses recognised for the year 3,247   2,817





Reconciliation of Movements in Shareholders' Funds
for the year ended 5 April 2008


              Called     Share      Capital      Capital    Capital   Revenue    Total
                  up   premium   redemption    reserve -    reserve   reserve
               share   reserve      reserve   unrealised          -
             capital                                       realised
                £000      £000         £000         £000       £000      £000     £000

Balance at 6     699     8,114           16       10,707     33,571     1,029   54,136
April 2006
Exchange           -         -            -        (717)          -         -    (717)
losses on
investments
Net gains on       -         -            -            -      1,087         -    1,087
realisation
of
investments
Net increase       -         -            -        2,330          -         -    2,330
in
unrealised
appreciation
Transfer on        -         -            -      (3,564)      3,564         -        -
disposal of
investments
Transaction        -         -            -         (64)       (12)         -     (76)
costs
Costs              -         -            -            -      (383)         -    (383)
charged to
capital
Tax on costs       -         -            -            -         54         -       54
charged to
capital
Net revenue        -         -            -            -          -       522      522
for the year
Total            699     8,114           16        8,692     37,881     1,551   56,953
Dividends          -         -            -            -          -     (377)    (377)
Balance at 5     699     8,114           16        8,692     37,881     1,174   56,576
April 2007


Balance at 6     699     8,114           16        8,692     37,881     1,174   56,576
April 2007
Exchange           -         -            -        3,008          -         -    3,008
gains on
investments
Net gains on       -         -            -            -        601         -      601
realisation
of
investments
Net decrease       -         -            -        (615)          -         -    (615)
in
unrealised
appreciation
Transfer on        -         -            -      (3,028)      3,028         -        -
disposal of
investments
Transaction        -         -            -         (48)       (20)         -     (68)
costs
Costs              -         -            -            -      (370)         -    (370)
charged to
capital
Tax on costs       -         -            -            -         95         -       95
charged to
capital
Net revenue        -         -            -            -          -       596      596
for the year
Total            699     8,114           16        8,009     41,215     1,770   59,823
Dividends          -         -            -            -          -     (391)    (391)
Balance at 5     699     8,114           16        8,009     41,215     1,379   59,432
April 2008



Balance Sheet
at 5 April 2008


                                             Note     2008       2007
                                                      £000       £000

Fixed assets
Investments:
    Listed investments                              54,851     52,721

Current assets
Debtors                                              4,558      3,857
Cash at bank                                           239        228
                                                     4,797      4,085
Creditors: amounts falling due within one              216        230
year

Net current assets                                   4,581      3,855

Net assets                                          59,432     56,576

Capital and Reserves
Called up share capital                                699        699
Share premium account                                8,114      8,114
Capital redemption reserve                              16         16
Capital reserve - unrealised                         8,009      8,692
Capital reserve - realised                          41,215     37,881
Revenue reserve                                      1,379      1,174

Total shareholders' funds - equity                  59,432     56,576

Net asset value per Ordinary Share            7   2,126.4p   2,024.2p



Approved by the Board on 22 May 2008


Mr T R Pattison
Chairman


Cash Flow Statement
for the year ended 5 April 2008


                                             Note     2008       2007
                                                      £000       £000

Net cash inflow from operating activities              215        334

Capital expenditure and financial investment
Payments to acquire investments                   (15,030)   (14,037)
Receipts from sale of investments                   15,826     16,948
                                                       796      2,911
Equity dividends paid                         8      (391)      (377)

Management of liquid resources
Cash paid to brokers awaiting investment             (609)    (2,785)

Increase in cash                                        11         83


Notes

1                                  Accounting Policies

The financial statements have been prepared on the basis of the
accounting policies set out in the audited financial statements for
the year ended 5 April 2007 and updated for the adoption of FRS 29,
"Financial Instrument Disclosures" in the current year.

2                                  Investment Income

                                                  2008   2007
                                                  £000   £000

Income from investments:
Income from UK bonds                               127     97
Income from UK equity and non-equity investments   214    290
Overseas interest                                  606    539
                                                   947    926
Deposit interest                                   176     64
Total income                                     1,123    990

                                                  2008   2007
                                                  £000   £000

Total income comprises:
Dividends                                          214    290
Interest                                           909    700
                                                 1,123    990
Income from investments comprises:
Listed in the UK                                   341    387
Listed overseas                                    606    539
                                                   947    926


3        Tax on ordinary activities


                                  2008                              2007
             Revenue   Capital   Total     Revenue       Capital   Total
                £000      £000    £000        £000          £000    £000
Tax
attributable    (95)        95       -        (54)            54       -
to
management
expenses
charged to
revenue


The current tax charge is reconciled to the standard rate of
Corporation Tax of 30% (2007: 30%) by the following factors:


                                     2008                        2007
                Revenue   Capital   Total   Revenue   Capital   Total
                   £000      £000    £000      £000      £000    £000
Return on           691     2,556   3,247       576     2,241   2,817
ordinary
activities
before taxation
Return on           207       767     974       173       672     845
ordinary
activities at
the standard
rate of UK
Corporation Tax
UK franked         (64)         -    (64)      (87)         -    (87)
dividends*
Capital               -     (862)   (862)         -     (726)   (726)
returns*
Adjustment for     (48)         -    (48)      (32)         -    (32)
reduced rate of
tax

Current tax          95      (95)       -        54      (54)       -
charge for the
year


* these items are not subject to Corporation Tax within an investment
trust company.

Potential deferred tax assets in respect of unrelieved management
charges of £36,000 and £48,000 at 5 April 2008 and 2007 respectively
have not been recognised as the prospect for their recovery against
future taxation liabilities is uncertain.

4                                  Investment management fee


                                    2008                        2007
               Revenue   Capital   Total   Revenue   Capital   Total
                  £000      £000    £000      £000      £000    £000
Management fee     159       370     529       164       383     547


The Company's Investment Manager CG Asset Management Limited received
an annual management fee equal to 0.85% of the gross assets of the
Company.  At 5 April 2008 £124,812 (2007: £139,198) was payable.  All
costs until October 2007 were inclusive of VAT. The payment of VAT on
management fees was suspended by HM Revenue and Customs from October
2007.

70% of the total investment management fee and connected costs are
allocated to the capital reserve - realised.

5                                  Directors' fees

                                                    2008    2007
                                                   Total   Total
                                                    £000    £000
The fees payable to the Directors were as follows:
Mr T R Pattison                                       12      12
Mr J C Morton                                          9       9
Mr R P A Spiller                                       7       7
Mr E G Meek                                            7       7
                                                      35      35


Mr R P A Spiller's fees are paid directly to his employer and VAT is
an additional cost thereon.  The Company made no pension
contributions (2007: £nil) in respect of Directors and no pension
benefits are accruing to any Director (2007: £nil).

Mr R P A Spiller received remuneration totalling £43,021  (2007:
£58,300) from CG Asset Management Limited in respect of services
provided by that company to Capital Gearing Trust plc.

Details of transactions with CG Asset Management Limited, of which Mr
R P A Spiller is a director, are disclosed in note 4.  There were no
other transactions with Directors during the year.

6                                  Return per Ordinary Share

Revenue return per Ordinary Share of 21.32p (2007: 18.68p) is based
on the net revenue return on ordinary activities after taxation of
£596,000 (2007: £522,000) and on 2,794,906 (2007: 2,794,906) Ordinary
Shares, being the weighted average number of Ordinary Shares in issue
in each year.

Capital return per Ordinary Share of 94.85p (2007: 82.11p) is based
on the net capital return for the financial year of £2,651,000 (2007:
£2,295,000) and on 2,794,906 (2007: 2,794,906) Ordinary Shares, being
the weighted average number of Ordinary Shares in issue in each year.

7                                  Net Asset Value per Share

The net asset value per share and the net asset values attributable
to each class of share at the year end calculated in accordance with
the Articles of Association were as follows:

            Net Asset Value per Share attributable to

                                                 2008       2007

Ordinary Shares (basic)                      2,126.4p   2,024.2p

            Net Asset Values attributable to
                                                 £000       £000
Ordinary Shares (basic)                        59,432     56,576


            The movements during the year in the assets attributable
to the Ordinary Shares were as follows:


                                  Assets attributable to
                                         Ordinary Shares
                                                    £000
Total net assets attributable at 6 April 2007     56,576
Total recognised gains for year                    3,247
Dividends appropriated in the year                 (391)
Total net assets attributable at 5 April 2008     59,432


Net asset value per Ordinary Share is based on the net assets, as
shown above, and on 2,794,906 (2007: 2,794,906) Ordinary Shares,
being the number of Ordinary Shares in issue at the year end.

8                                  Dividends


                                                      2008   2007
                                                      £000   £000
Ordinary Shares

2007 dividend paid 17 August 2007 (14.0p per share)    391      -
2006 dividend paid 28 July 2006 (13.5p per share)        -    377


The Directors have recommended to shareholders a final dividend of
16.5 pence per share for the year ended 5 April 2008.  If approved,
this dividend will be paid to shareholders on 14 July 2008.  This
dividend is subject to approval by shareholders at the Annual General
Meeting and, therefore, in accordance with FRS 21, it has not been
included as a liability in the financial statements.  The total
estimated dividend to be paid is £461,000.


                                                         2008    2007
                                                         £000    £000
Revenue available for distribution by way of dividend     596     522
for the year
Proposed final dividend of 16.5p for the year ended 5   (461)   (391)
April 2008
Undistributed revenue for section 842 Income and          135     131
Corporate Taxes Act 1988 purposes*


* Undistributed revenue comprises approximately 14.3% (2007:14.1%) of
income from investments of £947,000 (2007: £926,000).

9                      Related Party Transactions

Related party transactions with Mr R P A Spiller, a Director of the
Company, are disclosed in note 5 above. There were no other related
party transactions.


The financial information set out above does not constitute the
Company's statutory accounts for the years ended 5 April 2008 or
2007.  The financial information for the year ended 5 April 2007 is
derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies.  The Auditors reported on
those accounts and their report was unqualified and did not contain a
statement either under Article 245(2) or Article 245(3) of the
Companies (Northern Ireland) Order 1986.  The financial information
for the year ended 5 April 2008 has been prepared using the same
accounting policies as adopted in the company's statutory accounts
for the year ended 5 April 2007 and updated for the adoption of FRS
29, "Financial Instrument Disclosures" in the current year.  The
statutory accounts for the year ended 5 April 2008 will be finalised
on the basis of the financial information presented by the Directors
in this preliminary announcement and will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting.

Copies of the Company's Annual Report for the year ended 5 April 2008
will be sent to shareholders in June 2008 and will be available on
the Company's website www.capitalgearingtrust.com and on request from
the Company Secretary - TMF Nominees Limited, 400 Capability Green,
Luton LU1 3AE, Telephone: [phone]; E-mail:
 [e-mail].


For queries, please contact

Campbell Morton,
Senior Independent
Director
02890 763 631

TMF Corporate Secretarial Services
Limited
[e-mail]

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