HMRC has confirmed that the annual tax-free allowance for Capital Gains Tax (CGT) has been slashed to £3,000 for UK households, down from £12,300 in 2022/23. This dramatic reduction has fueled a significant rise in tax receipts, with HMRC data revealing that CGT receipts hit almost £24.3 billion in the 2025/26 tax year.
Sharp Increase in CGT Receipts
The latest figures from the Labour government show a 77% increase in CGT receipts compared to the previous year. Over the past decade, since 2015/16, CGT receipts have skyrocketed by 244%, according to commentators.
Clare Stinton, senior personal finance analyst at Hargreaves Lansdown, said: "CGT is proving a decent cash machine for the taxman. Recent HMRC data revealed that last tax year CGT added just under £24.3 billion to the public purse - up 77% on the previous tax year. Rewind a decade to 2015/16 and CGT receipts have skyrocketed by 244%."
Impact of Allowance Reduction
Stinton explained: "A major driver is the sharp reduction of the annual CGT allowance, now just £3,000, down from £12,300 in 2022/23. This means more people are pulled into paying CGT and on a bigger chunk of their gains."
She added: "Some people likely accelerated sales of long-term assets ahead of Labour's recent Budgets, amid speculation that CGT rates could rise - choosing to lock in rates they knew, rather than risk paying more later."
Official Response
HMRC states that individuals are entitled to a tax-free CGT allowance of £3,000 before tax becomes payable on gains. An HM Treasury spokesperson said: "The fair and necessary decisions we made at this Budget and the last mean we can deliver on the country's priorities – cutting waiting lists, cutting debt and borrowing, and cutting the cost of living.
"Capital Gains Tax on assets such as investments and additional properties is separate from the tax on income, with workers with a low or average income paying tax at a historically low level and benefitting from the highest Personal Allowance among the G7."
