CGT liabilities rise by 89% to record high in 2024/25

Capital gains tax (CGT) liabilities increased by 89 per cent to a record high of £24.2bn in the 2024/25 tax year, the latest figures from HMRC have shown.

The total amount of gains reported during the tax year was £127bn, an 82 per cent increase on the previous tax year.

HMRC noted that the increase to the main rates of CGT in 2024/25, consecutive annual reductions to the annual exempt amount (AEA), the announcement that the business asset disposal relief (BADR) rate would rise from April 2025, and speculation around increases to CGT rates before the 2024 Autumn Budget all contributed to the increase.

The number of taxpayers with CGT liabilities rose by 45 per cent year-on-year to an all-time high of 584,000 in 2024/25, with the reduction in the AEA in April 2024 bringing an additional 76,000 taxpayers into the scope of CGT.

Up to 163,000 taxpayers were brought into the scope of CGT by the consecutive reductions in AEA in April 2023 and 2024, HMRC added.

In 2024/25, 45 per cent of CGT liabilities came from those who made gains of £5m or more, which represented less than 1 per cent of CGT taxpayers.

London and the south east of England accounted for half (50 per cent) of the CGT liability in 2024/25.

Cryptoasset disposals were reported separately by taxpayers for the first time in 2024/25, with 17,600 individuals reporting total gains of £1.38bn.

“These record capital gains reflect how strongly tax policy can influence the timing of asset sales,” said Utmost senior relationship manager, Mark Jephcott.

“Speculation about higher CGT rates ahead of the Autumn 2024 Budget appears to have encouraged many investors to bring forward disposals to secure the existing rates, concentrating activity within the tax year.

“The subsequent announcement that BADR rates would rise from April 2025 created another incentive for business owners to complete sales before the changes took effect. Together, these pressures helped accelerate transactions that might otherwise have taken place in later years.

“Successive reductions in the annual tax-free allowance also brought more gains into the tax net, while the increase in the main CGT rates at the Autumn 2024 Budget added to the resulting tax liabilities.

“The figures therefore reflect more than growth in asset values: they show investors responding to both anticipated and confirmed policy changes.

“The question for the Treasury is how much activity was brought forward and whether that leaves a quieter period for disposals in the years ahead.”

Quilter tax and financial planning expert, Shaun Moore, added: “One particularly striking finding is the emergence of cryptoassets as a meaningful source of taxable gains.

“HMRC reports that 17,600 individuals declared £1.38bn of cryptoasset gains, with men accounting for 87 per cent of taxpayers reporting gains and 93 per cent of the gains themselves.

“These figures suggest crypto investing remains heavily concentrated among male investors, but the bigger story is the scale. Crypto is no longer sitting on the fringes of the tax system.

“Billions of pounds of gains are now being reported to HMRC, meaning crypto taxation is increasingly becoming a mainstream financial planning consideration alongside more traditional investments.”

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