HMRC Capital Gains Tax Receipts Surge 44% Amid Allowance Cut to £3,000
New data from HM Revenue & Customs has revealed a significant increase in Capital Gains Tax receipts, with figures for January 2026 reaching £16.985 billion compared to £10.033 billion in January 2025. Over the 12-month period from February 2025 to January 2026, total CGT receipts amounted to £20.6 billion, marking a substantial 44% rise from the previous year's £14.3 billion.
Expert Analysis on the Tax Revenue Spike
Jason Hollands, managing director at wealth management firm Evelyn Partners, provided commentary on these figures. He noted that the January 2026 CGT take of nearly £17 billion represents a 69% increase compared to January 2025's receipts of just over £10 billion. Hollands explained that January's data includes self-assessment bill payments for the 2024/25 tax year, potentially reflecting investors disposing of assets ahead of anticipated CGT rate increases.
"Many thought CGT rates were going up more than they did, with some Labour MPs arguing for equalisation with income tax rates," Hollands stated. "A summer of 2024 firesale of assets could be behind this spike."
Impact of Reduced Annual Exemption
The annual CGT exemption was reduced to just £3,000 by April 2024 under previous government policy. Hollands emphasized that this diminished protection against CGT for investors selling assets likely contributed to the revenue increase from pre-Budget disposals. "There was – and remains – little protection against CGT for investors selling assets, which will have turbo-charged the revenues from any pre-Budget disposals," he added.
Labour's Immediate CGT Rate Changes
Labour Party Chancellor Rachel Reeves implemented immediate CGT rate increases on 30 October 2024, raising rates from 10% to 18% for basic rate taxpayers and from 20% to 24% for higher rate taxpayers. These changes took effect immediately, except for non-exempt property disposals where taxable gains must be reported and CGT paid within 60 days of completion.
Future Implications and Investor Behavior
Hollands cautioned that it will take time to determine whether the revenue increase represents a one-off boost from pre-October 2024 disposals or reflects continued asset sales at higher CGT rates. "With taxes on capital gains, investors tend either to bring forward decisions ahead of anticipated changes or to defer crystallising gains afterwards, or both," he explained.
He further noted that many investors might now be waiting for future governments to reduce the CGT burden, while others could be discouraged from establishing or investing in businesses due to the higher tax environment. However, these behavioral impacts will not be evident for some time.
Historical Context and Revenue Trends
Final revenue data shows that CGT brought in £16.93 billion in 2022/23, £14.50 billion in 2023/24, and just £13.06 billion in 2024/25. This suggests that many investors were reluctant to sell assets with the reduced level of protection provided by the diminished annual exemption. The data indicates that the reduction of the annual exemption has provided little or no boost to Treasury coffers in terms of sustained revenue increases.
