New data on capital gains tax (CGT) arrives in time for the hunt for extra revenue ahead of the Autumn Budget.

Source: HMRC

CGT is one of the taxes which regularly appears on the list of possible tax increases as a Budget nears. In recent years, the possibility has twice become a reality:

• The annual exemption, which is the amount of net gains that can be realised in a tax year free of CGT, was cut from £12,300 in 2022/23 to £6,000 for 2023/24 and then £3,000 for 2024/25, where it is now frozen.
• The main rates of tax were increased from 10% (basic rate taxpayers) and 20% (higher and additional rate taxpayers) to 18% and 24% respectively in the Autumn Budget 2024.

The result of the changes has been a sharp rise in CGT liabilities for individual taxpayers, as the graph above demonstrates. New figures released by HMRC in August 2026 showed that individuals generated £22.5bn of CGT revenue in 2024/25, 86% more than in 2023/24.

Such a leap in tax receipts is not quite what it appears to be and demonstrates one of the features of CGT. While it seems distant now, in July 2024, Keir Starmer won the last general election. By the end of that month Rachel Reeves had revealed a £22 billion ‘black hole’, prompting investors to fear tax rises in the Autumn Budget 2024. In what economists label a ‘behavioural response’, some investors chose to take profits and trigger a tax liability before the feared rate increase, boosting the CGT figure for 2024/25.

That behavioural response comes from a relatively small group. In 2024/25, just over 550,000 people had a CGT bill – roughly one in 70 income taxpayers. Even the 550,000 CGT-paying population is something of a misleading number, because nearly 33,000 people accounted for over three-quarters of that £22.5bn of CGT. Among them, 3,000 realised gains of at least £5 million, paying an average of £3.3 million in tax.

If you have always thought of CGT as somebody else’s tax problem, in the future you could discover that the lowly £3,000 annual exemption proves you wrong – yet another reason to maximise your contributions to CGT-free individual savings accounts.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

The value of investments and the income from them can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits.

Investors do not pay any personal tax on income or gains, but ISAs may pay unrecoverable tax on income from stocks and shares received by the ISA managers.

Stocks and Shares ISAs invest in corporate bonds, stocks and shares and other assets that fluctuate in value.

Tax treatment varies according to individual circumstances and is subject to change.

The Financial Conduct Authority does not regulate tax advice.