Interim Management Statement

CAPITAL GEARING TRUST p.l.c

Interim Management Statement
for the period 6 April 2008 to 31 July 2008



In accordance with the UK Listing Authority's Disclosure and
Transparency Rules DTR 4.3, Capital Gearing Trust p.l.c (the
'Company') announces its interim management statement which relates
to the period from 6 April 2008 to 31 July 2008, and contains
information that covers this period, and up to the date of
publication of this interim management statement, unless otherwise
specified.

Investment Objective
The Company aims to achieve capital growth in absolute terms
principally through investment in quoted closed ended and other
collective investment vehicles, invested in equities or property,
with a willingness to hold cash, bonds, index linked securities and
commodities when appropriate.

Review of the period

Over the period from 6 April 2008 to 31 July 2008, the Company's Net
Asset Value ('NAV') decreased by 4.7% to 2,027.2p. As a comparator,
the FTSE Equity Investment Instruments Index fell by 6.2% although as
an absolute return fund, the actual performance benchmark is cash.

The share price has fallen to 2,110.0p per Ordinary Share, a decrease
of 1.2% from 6 April 2008.

On 30 May 2008, in accordance with the UKLA's Disclosure &
Transparency Rule 5.1.2, the Company announced that Mrs
Maunder-Taylor, sold 14,500 Ordinary Shares of 25p each on 30 May,
resulting in the percentage of voting rights held being reduced to
4.55% of the issued Ordinary share capital.

The Company published its Annual Report for the twelve months ended 5
April 2008 on 10 June 2008.

On 11 July 2008, the Company held its 45th Annual General Meeting,
fourteen resolutions were proposed and all were passed on a show of
hands vote.

A dividend of 16.5p per Ordinary share was paid to shareholders on 14
July 2008.

Material events and transactions

The portfolio maintained a defensive stance throughout the period.
Holdings in endowment funds were increased. Within bonds, exposure to
the Euro was reduced in favour of US$ inflation protected bonds. In
Canada, some profits were taken in inflation protected bonds which
were bid up to rich levels. Gresham House shares were sold and
property share trusts with large discounts were bought.

Further to the ruling of The European Court of Justice that
investment trusts are exempt from VAT on management fees, CG Asset
Management Limited have submitted a claim for repayment of VAT paid
on management fees to HM Revenue & Customs on behalf of the Company.
A response from HM revenue & Customs is awaited and will be announced
in due course.





Ten Largest Investments


Name                              % of Portfolio at % of portfolio at
                                  31 July 2008      5 April 2008

Sweden(Kingdom of)3.5% Bonds 2028 6.85              6.43
Life Offices Opportunities Trust  5.58              4.10
Switzerland(Govt of)2% Bonds 2014 5.33              5.26
France (Govt of)5.5% OAT 2029     4.55              4.47
Treasury 2.5% Index-Linked 2013   4.33              4.24
Switzerland(Govt of)3% Bonds 2018 4.22              4.21
Germany(Fed Rep)4.75% Bunds 2028  4.19              4.11
Allianz Dresdner 2nd Endowment    3.05              2.13
Policy Trust 2009
USA Treasury 2% TIPS 2016         3.00              -
Utilico Finance Limited Zero Div  2.53              2.45
Pref 2012



The ten largest investments at 31 July 2008 represent 43.63% of the
portfolio compared to 41.11% at 5 April 2008.


Distribution of Investment Funds of £56,658,350 at 31 July 2008.


Name                  UK     North Europe Elsewhere % 31 July 5 April
                       % America %      %                2008    2008
                                                      Total % Total %
Investment Trust
Assets:
Ordinary Shares     13.1       2.0    1.2         4.3    20.6    21.2
Endowment Funds      9.9         -      -           -     9.9     7.3
Zero Dividend       12.1         -      -           -    12.1    11.4
Preference Shares
Other Assets:
Fixed Interest       2.3         -   20.4         2.5    25.2    28.0
Index Linked         9.8       6.1   11.7           -    27.6    25.2
Cash                 4.6         -      -           -     4.6     6.9


Performance

                        At 31 July At 5 April At 5 October At 5 April
                        2008       2008       2007         2007
NAV per Ordinary Share  2,027.2p   2,126.4p   2,019.4p     2,024.2p
FTSE Equity Investment  5,410.2    5,765.2    6,324.6      6,032.7
Instruments Index
Share Price per         2,110.0    2,135.0p   2,050.0p     2,060.0p
Ordinary Share



Past performance is not a guide to future performance. The Board is
not aware of any significant events or transactions which have
occurred between the 'as at' date of the financial information and
the date of publication of the IMS which would have a material impact
on the financial position of the company.

Further information is available on the Company's website,
www.capitalgearingtrust.com.
Please contact [e-mail] or,
CG AssetManagement Limited at 25 Moorgate, London, EC2R 6AY.

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