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Capital Gains Tax (CGT) has become one of the fastest-rising tax concerns for UK investors, property owners, and individuals selling valuable assets. With the allowance cut drastically and rates increasing, HMRC is collecting more revenue from this area — and more taxpayers are getting caught by surprise. Understanding how the system works and where you might fall within it is essential to avoid unexpected tax bills.
A Sharp Rise in CGT Activity
Recent HMRC data shows that Capital Gains Tax (CGT) receipts have increased significantly in recent years, as more people are now required to pay it. In the last quarter of 2024, over £800 million in CGT was collected, approximately 60% more than the previous year.
By January 2025, total collections exceeded £10 billion, mainly due to Self Assessment payments. Many experts believe this rise in receipts is due to taxpayers attempting to realise their gains before potential changes to tax rates and allowance cuts.
Changing Allowances and Higher Rates
The annual CGT allowance has been reduced dramatically. Only a short time ago, in the 2022/23 tax year, individuals could realise gains of up to £12,300 before paying any tax. This fell to £6,000 in 2023/24 and now stands at just £3,000.
That reduction means thousands of people who were previously unaffected by CGT now have to pay it. Even relatively small gains from selling shares, second homes, or digital assets can easily exceed the threshold.
Rates have also moved higher. For basic-rate taxpayers, the rate on non-property assets has risen from 10% to 18%. For higher-rate taxpayers, the rate has increased from 20% to 24%. These changes make it even more important to understand how and when you could trigger a charge.
The Hidden Traps That Create CGT Bills
CGT is not just a tax on selling investments. It can apply in several situations that often catch people off guard.
Gifts and undervalued sales
Giving away an asset to anyone other than a spouse or civil partner is treated as a sale at market value. Even if no money changes hands, you could still be liable for tax on the gain.
Similarly, if you sell something for less than its true market value — for example, a second property or shares in a private company — HMRC will still calculate tax as though you had sold it at full value.
Spouse and civil partner transfers
Transfers between spouses or civil partners are exempt from CGT at the time of transfer, but the receiving partner inherits the original acquisition cost. When they later sell the asset, the gain will be calculated based on the original cost.
Expanding scope of CGT
HMRC’s net has widened significantly. Assets that once flew under the radar — such as cryptoassets, NFTs, or valuable items sold online — can now create a taxable event. Selling, swapping, or spending crypto is treated as a disposal for CGT purposes.
Similarly, selling high-value items such as jewellery, paintings, or antiques online for more than £6,000 can result in a CGT charge if the gain exceeds £3,000.
Reporting and Payment Deadlines
The CGT reporting process depends on the type of asset sold.
For residential property, the disposal must be reported within 60 days of completion, with a best-estimate tax payment made at the same time.
For other assets, such as shares or crypto, you can report the gain through your Self Assessment tax return or via HMRC’s online real-time reporting service if you don’t usually file a tax return. The payment deadline is 31 January, following the end of the tax year in which the disposal took place.
Accurate reporting is crucial. Missing deadlines or misreporting gains can result in interest and penalties, particularly as HMRC’s systems become more sophisticated in identifying undeclared disposals.
A Wider Net and a Smaller Margin
As allowances shrink and the list of taxable assets grows, CGT is affecting more people than ever before. Even individuals who make only occasional investments or small property sales can find themselves facing unexpected bills.
The combination of lower thresholds, higher rates and greater HMRC visibility means planning has never been more important. Keeping clear records of acquisition costs, sale values, and associated fees is essential. For those who hold cryptocurrency or other digital assets, accurate transaction records will be crucial for calculating gains correctly.
Capital Gains Tax (CGT) is increasingly affecting UK taxpayers due to reduced allowances, higher rates, and a broader scope. Modest gains can now result in a tax liability. It’s essential to understand CGT, maintain accurate records, and time disposals wisely. With HMRC actively identifying unreported gains, knowing your tax position before selling or transferring is crucial.
At Tax Accountant, we assist clients in assessing CGT exposure and managing reporting requirements to minimise tax costs. If you’re uncertain about these changes, seeking professional advice is advisable.