HM Revenue & Customs data today showed that Capital Gains Tax receipts for April 2025 to March 2026 were £22.187 billion compared to £13.687 billion in the same period of 2024/25.
Jason Hollands, managing director at wealth management firm Evelyn Partners, comments:
‘While this monthly receipts data gives a quick snapshot that will be refined, it suggests that about 62 per cent more was paid to the Treasury in CGT in the 2025/26 financial year than in the previous one. Much of that significant jump in the tax take arrived in the first three months of this year, which include the payment of self-assessment bills for the 2024/25 tax year.
‘That suggests the surge was driven by investors disposing of assets after April 2024 but ahead of an expected rise in CGT rates that duly arrived at the October 2024 Budget.[1] Before that Budget, many asset-owners thought CGT rates were going up more than they did, with some Labour MPs arguing for an equalisation with income tax rates, so it seems likely much of this spike in CGT revenues is due to pre-emptive disposals in those middle months of 2024.
‘Will we be back in the same place this summer and autumn? This week the Resolution Foundation – a think tank influential with the Government – urged the Chancellor not to “let a good crisis to waste” and raise taxes further as the war in the Middle East threatens more pressure on the public finances. With the Government’s backbenchers resistant to spending cuts and unrest in Downing Street, another summer of speculation about tax rises looks inevitable, and a further hike in CGT cannot be ruled out.
‘With taxes on capital gains, investors tend either to bring forward decisions ahead of anticipated changes or to defer crystallising gains afterwards, or both. Many might now wait for a future government to bring the CGT burden back down, others might be put off by the higher tax environment from setting up or investing in businesses in the first place. Any distortive effects, and whether CGT revenues remain elevated beyond this recent boost, will only become clear in subsequent years – but history, and evidence from other countries, suggest that higher taxes on investment are rarely helpful in either sense.
‘As the annual CGT exemption had been slashed by the previous Government to a meagre £3,000 by April 2024 there was – and remains – little protection against CGT for investors selling assets, which will have turbo-charged the revenues from any pre-Budget disposals in the summer of 2024. Before that the slashed exemption did nothing to boost the CGT take: final revenue data shows that CGT brought in £16.93 billion in 2022/23, £14.50 billion in 2023/24 and just £13.06 billion in 2024/25, suggesting that many investors were reluctant to sell up with this diminished level of protection.[2]’
[1] Rachel Reeves increased CGT rates with immediate effect on 30 October 2024 from 10% to 18% for basic rate taxpayers and 20% to 24% for those on the higher rates of tax. With the exception of non-exempt property disposals where taxable gains need to be reported and CGT paid within 60-days of completion, capital gains on other assets are typically disclosed via self-assessment and tend to lag longer in the data.
[2] https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk
