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Capital gains tax receipts have more than doubled following recent policy changes from the Labour Government
The Treasury raked in a "meteoric" £24.2billion in capital gains tax (CGT) in the 2024/25 tax year ahead of Chancellor John Healey's Budget announcement.
According to HM Revenue and Customs (HMRC) figures published today, receipts for the levy doubled the £12.8 billion collected in the previous year.
The dramatic jump, representing an 89 per cent rise in CGT liabilities, was fuelled by a wave of asset disposals as taxpayers scrambled to crystallise gains ahead of changes announced in the Autumn Budget 2024.
Successive cuts to the tax-free allowance, an increase to the main CGT rates partway through the year, and widespread speculation about further hikes all prompted individuals to bring forward sales of investments, property and business assets before less favourable rules took effect.
Reported gains reached a total of £127billion across the year, marking an 82 per cent jump compared with 2023/24. The number of individuals paying CGT climbed 45 per cent to an all-time high of 584,000.
A significant portion of that increase was driven by reductions to the annual exempt amount. The lowering of the tax-free threshold on April 6, 2024 alone drew an estimated 76,000 additional people into the CGT net.
Taken together, the consecutive cuts to the allowance introduced in April 2023 and April 2024 brought as many as 163,000 new taxpayers within the levy's scope.
These are individuals who would previously have fallen beneath the reporting threshold but now face a liability on their gains thanks to fiscal drag.
Fewer than one in a hundred CGT taxpayers, those realising gains of £5million or more, accounted for 45 per cent of the total take in 2024/25.
The main CGT rates were raised midway through the tax year, while the announcement that the Business Asset Disposal Relief rate would increase from April 2025 prompted business owners to accelerate sales before the higher charge applied.
Pre-Budget speculation about even steeper rate rises added further urgency, encouraging a rush of disposals in the months before the Autumn Budget 2024.
Elizabeth Bradley, a partner at international law firm BCLP, cautioned that the record haul may prove fleeting.
She said: "Today's meteoric rise in CGT liabilities offers the Chancellor some short-term relief, but it may be a sugar hit caused by forestalling.
"These bumper liabilities could be borrowing from future years, leaving a hole in the medium-term fiscal plan.
"Some taxpayers could accelerate disposals ahead of the forthcoming Autumn Statement from the new Chancellor, while others may simply defer gains for years, a pattern seen repeatedly after past CGT reforms.
"Either way, today's rise may not translate into stronger receipts for the rest of this Parliament."
