UK capital gains tax receipts jumped to a record £24.3bn in 2025-26 after the annual exempt amount was cut to £3,000 and rates were increased in October 2024.
The haul is almost an 80% rise on the previous year’s take of £13.7bn and has prompted one senior industry figure to call it "a decent cash machine for the taxman." On a per-household basis the increase worked out at roughly £800 each on the same figures.
Capital gains tax is the levy on the profit you make when you sell or dispose of something that has increased in value. It applies to gains from investments not held in an Isa, property that is not your main home, and personal possessions worth £6,000 or more (apart from a car). Until 2022-23 the annual tax-free allowance was £12,300; it was then cut to £6,000 and has been reduced again to £3,000 for the latest year.
Rates rose in October 2024. Higher-rate taxpayers now pay 24% on gains; basic-rate taxpayers face 18% on gains in some cases, depending on the size of the gain and their taxable income. The allowance refreshes each tax year and is lost if unused, which means gains that formerly fell below the threshold can now be liable for tax.
For savers and small investors this is not an abstract change. Money held inside an Isa is sheltered: UK residents aged 18 or over can invest up to £20,000 each per tax year, parents can fund a junior Isa with up to £9,000 per child, and some adults under 40 can use a lifetime Isa to save for a first home. A family of four, for example, could be "making a total of £58,000" in Isa contributions in a single year, Elsa Littlewood notes.
There are legitimate steps to reduce a capital gains tax bill. Transfers of assets between spouses or civil partners usually do not trigger the tax. Losses can be set against gains, and from 2026-27 onward losses can be offset against taxable gains in later years if claimed through a tax return. Littlewood adds: "So matching gains and losses can cut the overall tax bill."
The recent numbers expose a contrast. The tax changes were described as targeting a broader base of investment income rather than only very large fortunes, yet the result has been record receipts for the Exchequer. That mixture — a lower allowance and higher rates on paper aimed at increasing fairness, delivering a sharp revenue jump in practice — is drawing scrutiny from advisers and campaigners who want to know who, exactly, is now paying.
Official forecasts suggest the yield will keep rising. The Office for Budget Responsibility expects capital gains tax receipts to reach £35bn in 2030-31, which would embed CGT as a more significant and predictable revenue stream for the government than it has been for years.
For everyday households the practical consequence is straightforward: assets held outside tax-advantaged wrappers should be reviewed. Selling an investment, disposing of a second property, or realising gains on collectibles can now push an ordinary saver into a tax bill where none would have fallen due a few years ago.
What remains unresolved for savers and advisers is the composition of the receipts: how many individual taxpayers have been newly drawn into paying capital gains tax because of the lower allowance. The headline revenue impact is clear; the distribution across ordinary investors, small landlords and wealthier sellers is not yet publicly disclosed. That gap matters because it determines how many people need to change saving and selling plans, and how urgently.
