Government income from Capital Gains Tax (CGT) has risen sharply, according to the latest data from HM Revenue and Customs.
For the 2025/26 tax year, CGT receipts reached just under £24.3 billion, marking a rise of around 77% compared with the previous year. Over a longer timeframe, analysis by Hargreaves Lansdown shows that CGT revenue has increased by approximately 244% since 2015/16.
More Taxpayers Being Drawn Into CGT
Clare Stinton, senior personal finance analyst at Hargreaves Lansdown, explains that CGT can apply not only when selling investments but also when transferring assets as gifts, except when passing them to a spouse or civil partner.
One of the key reasons for the rise in CGT receipts is the reduction in the annual tax-free allowance. This has fallen significantly to £3,000, compared with £12,300 in 2022/23. As a result, more individuals are now liable for CGT, and on a larger portion of their gains.
At the same time, CGT rates were increased in October 2024. The basic rate band rose from 10% to 18%, while higher and additional rate taxpayers now pay 24%, up from 20%.
Behavioural Changes and Market Timing
Another factor contributing to the increase in receipts is behavioural. Some investors are believed to have brought forward the sale of assets ahead of recent fiscal announcements, in anticipation of further tax changes. This meant locking in existing rates rather than risking higher charges later on.
Stinton notes that gains from long-held investments can be particularly large, especially when accumulated over many years of growth without inflation adjustments. In many cases, these gains can easily exceed the reduced £3,000 allowance.
Planning Becomes More Important
The analysis suggests that careful, long-term financial planning is increasingly important for those managing investment portfolios. With lower allowances and higher rates in place, more individuals are likely to find themselves within the scope of CGT unless they plan disposals strategically.
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