Record levels of capital gains tax received in 2018-19

An unprecedented £9.5 billion was recouped in capital gains tax (CGT), realised via 276,000 taxpayers who reported chargeable gains worth £62.8bn in 2018-19.

Around 40% of all CGT received was derived from individuals who made gains of at least £5 million in 2018-19, equating to a demographic of less than 1% of all CGT taxpayers.

Just over 25% of all CGT received came via disposals of qualifying entrepreneurs’ relief. This relief, which enables taxpayers selling a business or shares to pay capital gains tax on profits at reduced rates, was claimed by 46,000 individuals, equating to £2.7 billion of the overall £9.5 billion paid.

HMRC revealed the number of gains eligible for entrepreneurs’ relief has more than doubled in the last eight years.

It’s possible that the record number of claims made for entrepreneurs’ relief in 2018-19 could have encouraged Chancellor Rishi Sunak’s move to cap lifetime entrepreneurs’ relief at £1 million, with the reduced tax rates on qualifying capital gains proving costly for the Treasury.

Recent consultations by the think-tank, the Institute for Fiscal Studies (IFS), claims that not taxing these qualifying capital gains at the full 20% rate is costing the Exchequer £2.7 billion a year.

If you are planning on disposing of assets whether it is property, shares, etc. you may not be aware of reliefs or exemptions available to you.

We can work with you to advise you on any possible capital gains tax savings you are entitled to and calculate any tax liabilities that may still be due.

To arrange a free initial consultation on mitigating or reducing your potential capital gains tax liabilities, please don’t hesitate to contact our friendly, experienced team today on 020 3941 2011.

Alternatively, you can drop us a line and detail your personal circumstances using our online enquiry form.

Date published 21 Aug 2020 | Last updated 7 Oct 2020