Capital gains tax receipts fall 8% as investors defer disposals

Capital gains tax receipts fell by 8.4% to £13.64bn in 2025, according to data released today (22 January) by HM Revenue and Customs, following changes to annual exemptions and rates.  

The figures follow a reduction in the annual exemption allowance, which fell from £12,300 in the 2022/23 tax year to £3k in 2024/25. Tax revenues peaked at £16.93bn in 2022/23.

In light of this, investors are now awaiting further data to assess the impact of rate increases introduced in October 2024. Most capital gains are disclosed via self-assessment, creating a lag in official reporting.

Jason Hollands, managing director of Evelyn Partners, said: “This marked decrease in capital gains tax receipts indicates that taxpayers are swerving this and the previous government’s crackdown on capital gains by sitting tight and deferring disposals, suggesting the futility of over-taxing investors and business owners.

“The CGT data from not just today, but the last few years and through history, suggests that investors either bring forward decisions ahead of anticipated changes or are deterred from crystallising gains afterwards, or both. This exposes the trouble with increasing the CGT burden: investors will change their plans and behaviour accordingly to avoid paying tax where they feel it is too high. In many cases, a more aggressive tax environment leads to lower rather than higher revenues.”

He added: “In summary, the data does not bode well for the chancellor’s hopes that her CGT rate hikes will bolster the public purse over the coming years. While taxing investors more heavily on gains from capital they have put at risk does not seem to work as a revenue raiser, what it does risk is discouraging entrepreneurialism and investment, which the country needs to boost growth.”