HMRC revenue from Capital Gains Tax jumps fourfold as businesses sell off assets
The government has collected almost £10bn from capital gains tax (CGT), a fourfold increase compared to a decade earlier.
New HMRC data shows the taxman collected £9.94bn in the 2019-2020 tax year a sizeable jump from the £2.55bn sum taken for the year ending in April 2009.
Over 28 per cent of CGT came from businesses selling off assets before an upcoming reduction to capital gains relief.
Record numbers of taxpayers claimed Entrepreneurs’ Relief, a reduced rate for CGT, ahead of the threshold for the £10m lifetime allowance being slashed.
A CGT rate of 20 per cent will apply to gains over the £1m threshold for transactions made on or after 11 March 2020.
Richard Jameson, a partner in the Private Wealth team at Saffery Champness said: “These statistics may represent something of a watershed moment for the UK’s Capital Gains Tax regime, in more ways than one.”
He commented that the changes to tax rules are likely “prompting individuals to accelerate business asset disposals to get them over the line in the month before the changes came into effect.”
With the government looking to fill the hole left by pandemic spending Jameson speculated that a “more drastic approach to taxing capital wealth” could be forthcoming.