HM Revenue & Customs (HMRC) has revealed that Capital Gains Tax (CGT) receipts have reached unprecedented levels, with January 2026 alone generating £16.985 billion. This represents a dramatic increase of £7 billion compared with the same month the previous year, signalling one of the largest surges in CGT revenue on record.
Over the 12 months spanning February 2025 to January 2026, total CGT receipts amounted to £20.6 billion – up from £14.3 billion in the prior 12-month period. This 44% rise highlights how the government is increasingly relying on taxes from asset disposals, with property sales by landlords emerging as a significant factor behind the growth.
Surge in CGT: Why It Happened
Financial experts point to several key reasons for the dramatic rise in CGT revenue. Jason Hollands, managing director at wealth management firm Evelyn Partners, explained that the January 2026 figure includes self-assessment payments for the 2024/25 tax year. This timing means the spike likely reflects investors selling assets ahead of the October 2024 Budget, which introduced higher CGT rates.
“Many investors anticipated even steeper increases, particularly given some political pressure for CGT to be equalised with income tax rates,” Hollands said. “This created a wave of asset disposals in mid-2024, effectively a pre-Budget ‘fire sale’, which has now materialised as higher revenue for HMRC.”
Additionally, the annual CGT exemption had been reduced to just £3,000 by April 2024. This effectively removed much of the protection investors previously enjoyed, meaning any gains realised above this threshold were immediately taxable. The combination of reduced exemptions and anticipated tax hikes helped turbocharge CGT receipts.
Landlords Feeling the Pressure
Landlords in the private rental sector have been among the most affected by the rising CGT burden. Faced with higher taxation, tighter regulations, and increased compliance costs, many have opted to sell their properties rather than continue renting them out.
This trend has not only influenced CGT receipts but also contributed to shifts in the rental market. Fewer properties on the market can lead to increased competition for tenants and, in some areas, higher rents. At the same time, some landlords may be strategically timing their sales or refraining from investing in new rental properties until the tax landscape becomes more favourable.
Hollands explained that, with capital gains tax, investor behaviour often fluctuates: “Investors tend either to bring forward decisions ahead of anticipated changes or defer crystallising gains afterwards, or sometimes both. The full effect of these market dynamics will only become apparent over the next few years.”
Market and Economic Implications
The surge in CGT receipts highlights broader economic considerations. Higher tax bills may discourage property investment, impacting both the supply of rental properties and the wider housing market. In the short term, however, government revenues have benefited significantly, helping to fund public services and contribute to fiscal stability.
Some analysts suggest that this level of revenue may be temporary, largely driven by pre-Budget disposals, while others see it as part of a longer-term trend as landlords and investors adjust to a higher-tax environment. Regardless, the figures underscore the impact of policy changes on investor decisions and property market behaviour.
The implications extend beyond property. With higher CGT rates, some investors may postpone entrepreneurial ventures or business expansions, waiting for a potentially more favourable tax climate. Conversely, others may be motivated to sell off underperforming assets quickly, reshaping market activity across sectors.
Looking Ahead
It remains to be seen whether the surge in CGT receipts will continue in 2026 and beyond. While the January spike may partially reflect one-off disposals in anticipation of the October 2024 Budget, it also demonstrates the government’s growing reliance on CGT revenue.
Investors and landlords must now carefully consider the timing of any asset sales, tax planning strategies, and investment decisions. Many may be waiting to see if future governments reduce the CGT burden, while others may adapt to the higher-tax environment by reassessing property portfolios and long-term financial plans.
Ultimately, the record figures emphasise how taxation, policy changes, and investor behaviour intersect to influence both market trends and public finances. As the CGT landscape continues to evolve, landlords, property investors, and financial advisers will need to stay alert to both risks and opportunities in a shifting property market.
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