Official data shows that capital gains tax (CGT) receipts have almost doubled over the last 4 years, representing a record breaking £15.3 billion in the year to 31 October 2022.
Part of this meteoric rise in CGT takings can be attributed to a rush in property sales. The end of the pandemic, stamp duty holiday and linked increases in property prices encouraged volumes of buy-to-let investors to sell their assets and take advantage of market conditions.
The cutback in the lifetime allowance of Business Asset Disposal Relief (BADR) in March 2020, from £10 million to £1 million, was a further factor, with just 8% of the CGT total coming from disposals that qualified for BADR – a dramatic decrease from 28.4% the previous year.
CGT receipts appear to show no sign of easing up too, with the individual CGT exemption allowance set to decrease from £12,300 to £6,000 in April 2023 and even lower to £3,000 in April 2024, essentially doubling the number those required to report and pay tax on their capital gains.
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