UK’s CGT liability totals £14.4bn, HMRC figures reveal

The total capital gains tax (CGT) liability was £14.4bn for 369,000 taxpayers in the 2022/23 tax year, realised on £80.6bn of gains, new figures published by HMRC have revealed.

This represents decreases in both CGT liability and the number of taxpayers of 15% and 8%, respectively, from the 2021/22 tax year.

Although total CGT liability decreased in 2022/23, liabilities realised on residential property disposals increased.

Most CGT comes from the small number of taxpayers who make the largest gains. In 2022/23, 41% of CGT came from those who made gains of £5m or more – a group that represents less than 1% of CGT taxpayers each year.

Tax and financial planning expert at Quilter, Shaun Moore, commented that despite the fall in the number of taxpayers in 2022/23, the latest CGT figures have revealed a “dramatic long-term shift” in the number of people paying the tax.

“Since the 1993/94 tax year, the number of people paying CGT has surged by an astonishing 427%, rising from 90,000 to 369,000 taxpayers,” Moore highlighted. “Correspondingly, the tax revenue has skyrocketed from £60m to a staggering £14bn.

“In recent years, CGT allowances have been slashed to help plug the fiscal blackhole the UK is suffering. The annual tax-free allowance for capital gains was cut from £12,300 to £6,000 in 2023 and fell to £3,000 from April 2024, impacting those looking to sell shares, other assets or second homes.

“While Rachel Reeves has committed to not raising headline tax rates, she has been tight-lipped on CGT. She has since conceded that tax changes might be necessary in the autumn budget to stabilise public finances.”

Moore suggested that if CGT rates were to be aligned with income tax rates at the next Budget, it could lead to “significant short and long-term repercussions”.

“Without anti-forestalling measures, there could be a rush to sell second properties, temporarily boosting housing market activity and prompting investors to reconsider their portfolios,” he added.

“At this point, no changes have been announced. Therefore, making decisions based on potential future legislation is not advisable unless selling a second home or buy-to-let property is already part of your plan. These figures, however, highlight the potential for increased tax burdens in the future.”



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