The Government made £9.5bn from 276,000 capital gains tax (CGT) taxpayers in the 2018/19 tax year, according to new HMRC data.

The £9.5bn CGT liability was a 6% increase from the previous tax year, despite the total number of taxpayers seeing a fall of 4%.

HMRC revealed the total chargeable gains for CGT was £62.8bn, which was an increase of 7% from the previous year.

The figures also showed that that in 2018/19, 40% of CGT came from those who made gains of £5m or more. However, this group represents less than 1% of CGT taxpayers each year.

AJ Bell personal finance analyst, Laura Suter, suggested that all eyes would be on how much the Government is making in CGT after Chancellor, Rishi Sunak, announced a review of the tax ahead of his spending review later this year.

“Many are expecting a crackdown on CGT reliefs and allowances or a raising of the rates, or both, as the Government scrambles to fill the large holes in its finances brought about by the Covid-19 crisis,” Suter said.
 
“In total, 276,000 people paid the tax in 2018/19, a drop of 4% on the previous year. This represents few than 1% of the total people paying income tax. This points to the fact that the Government may decide to bring more people into the CGT net, meaning more individuals pay the tax, or align the CGT rates with income tax.
 
“Another area that may pique the Government’s interest is the level of gains versus the actual tax take after all allowances and reliefs are taken into account. There were £62.8bn of total gains made by individuals in 2018/19 but only £9.5bn of tax taken, representing an average tax rate of 15%.”

Hargreaves Lansdown personal finance analyst, Sarah Coles, added: “CGT is a cash cow for the Government – rising to record highs year after year. But if the Government is tempted to squeeze this cash cow a bit harder to pay for its COVID-19 spending, it could get a nasty surprise.
 
“On the face of it, CGT is an ideal candidate for a tax grab, because not only has it hit record highs, it also falls so much more heavily on the highest earners and those who have made the biggest gains. It’s politically very popular.
 
“But in other ways it’s far too unpredictable, because tweaking CGT has a dramatic impact on people’s behaviour. If you start shifting thresholds around, the Government estimates that in the first year it could have precisely the opposite impact to the one you’re expecting.
 
“Regardless of whether CGT changes or not, it’s going to continue to be a money-spinner for the Government, and a miserable drain on gains for many investors. The good news is that there are some easy ways to avoid paying over the odds and keeping CGT under control.”

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