National statistics

Background Quality Report - Capital Gains Tax Statistics

Updated 3 August 2023

1. Contacts

• Organisation unit – Knowledge, Analysis, and Intelligence (KAI)
• Names – M Minev & T Penny
• Function – Capital Gains Tax Analysis, Personal Taxes
• Mail address – 3rd Floor, 100 Parliament Street, London, SW1A 2BQ
• Email – cgt.statistics@hmrc.gov.uk

2. Statistical presentation

2.1 Data description

This publication is the annual update of the Capital Gains Tax (CGT) National Statistics. The statistics include information taken from Self Assessment returns on the number of capital gains taxpayers, amounts of capital gains and tax liabilities, and the amount claimed on Business Asset Disposal Relief and Investors’ Relief, as well as breakdowns by size of gain, taxable income, region and age up to the 2021 to 2022 tax year (Tables 1 to 6).

The publication also presents a breakdown of holding periods, disposal proceeds and gains by asset type in the 2020 to 2021 tax year (Table 7). This is taken from a sample of the additional information pages submitted alongside CGT Self Assessment returns. Finally, Table 8 includes statistics on residential property disposals, gains, and liabilities reported through the new CGT on UK Property service for the 2020 to 2021, 2021 to 2022 and 2022 to 2023 tax years.

CGT is charged on gains realised on the disposal of assets. For this purpose, the disposal of an asset includes any occasion when the beneficial ownership (relating to the person who benefits from the asset) of part or all of an asset is transferred from one person to another. The capital gain is broadly the difference between the disposal proceeds and the cost of acquiring the asset. Further information is available at Capital Gains Tax.

Only information for taxpayers who have a CGT liability is included in the publication and only chargeable gains are reported as defined under the “Gain” definitions in section 2.4 ‘Statistical concepts and definitions’.

This publication only includes figures for past tax years. Forecasts of future CGT gains and liabilities are produced and published by the Office for Budget Responsibility, and can be found on their website.

2.2 Classification system

This publication reports breakdowns of the number of CGT liable taxpayers and the value of their gains, liabilities, and reliefs claimed based on data submitted by individuals, trusts, and personal representatives of deceased persons on their CGT returns submitted either through Self Assessment or the CGT on UK Property service.

2.3 Sector coverage

CGT is charged on gains made on the disposals of assets including (but not limited to) commercial and residential property, listed and unlisted shares, business assets, and personal possessions worth £6,000 or more. Gains made on the disposal of assets not subject to CGT (such as main residences covered by Private Residence Relief, personal possessions classified as ‘wasting assets’, and shares in ISAs or PEPs) are not covered in this publication.

2.4 Statistical concepts and definitions

Accrual

The amount of tax liability in a tax year. This differs from tax receipts as there is a delay between liabilities arising on asset disposals and the tax due being paid to HMRC.

Allowable Loss

The loss or losses resulting from the disposal of one or more assets, which can be used to reduce the gain or gains made on one or more other assets.

Annual Exempt Amount (AEA)

The amount of a person’s total gain which is not subject to CGT. This amount is available annually and cannot be carried forward if the full extent has not been used in a previous year.

Asset

Something that a person owns, benefits from, or has use of.

Attributed Gains

Certain gains, capital payments or benefits, received as a beneficiary from a non-UK resident trust where personal losses cannot be offset.

Business Asset Disposal Relief (BADR)

A tax relief for CGT introduced in the 2008 to 2009 tax year. See Table 4 and supporting documentation for more information. This was renamed from Entrepreneurs’ Relief (ER) to Business Asset Disposal Relief on 6 April 2020.

Chargeable Person

For the purposes of CGT, a chargeable person is defined as an individual, representative or trust that is subject to CGT. This includes partners, but not partnerships.

Disposal

In most cases a person is said to make a disposal when they cease to be the beneficial owner of an asset. The most common of these is the sale of an asset or part of an asset. Gifting or exchanging assets are also deemed as disposals. Other less obvious disposals include: the loss or destruction of a chargeable asset; abandonment or loss of rights; insurance proceeds received as a result of theft or loss of an insured asset; and receipt of a capital sum for an interest in or right in or over an asset.

Disposal Date or Time

For CGT purposes, this is normally defined as the date at which ownership of the asset is transferred.

Disposal Proceeds

This is usually the payment received upon the disposal of the asset. Sometimes the market value of the asset is used instead of the sale or purchase price.

Entrepreneurs’ Relief (ER)

See ‘Business Asset Disposal Relief (BADR)’

Gains in the year, before losses

This is usually the difference between what a person pays for a chargeable asset and the proceeds following a disposal. Certain costs can be deducted, such as the costs of buying, selling, or improving the asset. These gains are also net of any reliefs, claims or elections.

Gains (Tables 1, 2, 3, 5 and 6)

For years up to the 1997 to 1998 tax year, “Gains” are defined as the sum of “gains in the year before losses” from all disposals made by a taxpayer after the deduction of indexation allowance and in-year capital losses, but before the deduction of the Annual Exempt Amount, past capital losses, or trading losses.

For years from the 1998 to 1999 tax year, “Gains” refers to total “gains in the year before losses” after the deduction of in-year capital losses, trading losses, past capital losses and taper relief, but before the deduction the Annual Exempt Amount.

For years from the 2008 to 2009 tax year, “Gains” refers to total “gains in the year before losses” after the deduction of in-year capital losses, trading losses and past capital losses, but before the deduction the Annual Exempt Amount. This is because taper relief was abolished in the 2008 to 2009 tax year.

Gains (Table 4)

Gains reported in the Business Asset Disposal Relief and Investors’ Relief tables are before the deduction of losses and the Annual Exempt Amount, as reported by taxpayers in the relevant boxes on the SA108 Self Assessment tax return.

Gains (Table 7)

Gains reported in Table 7 are before the deduction of losses and the Annual Exempt Amount. However, Aggregate gains estimates in Table 7 include any in-year losses reported relating to the asset category presented. Gains are reported before the deduction of the Annual Exempt Amount.

Gains (Table 8)

Gains reported in Table 8 are after the deduction of in-year capital losses, trading losses and past capital losses, but before the deduction the Annual Exempt Amount. Taxpayers are required to submit a CGT on residential property return within 60 days of the completion of a transaction (30 days for disposals completed before 27 October 2021) which will typically take place before the end of the tax year. Therefore, a taxpayer’s net tax position for the year will not be finalised and not all eligible deductions such as in-year losses may be offset against the gains reported in Table 8.

Holding Period

The time period for which a person possesses, or is otherwise the beneficial owner of, an asset. This is the time between acquisition and disposal.

Indexation Allowance

Indexation allowance is an allowance that offsets nominal gains attributable to inflationary increases in the value of an asset in line with the Retail Price Index. For disposals up to and including the 5 April 1998 indexation allowance is applied. After that date it was frozen and abolished entirely from 6 April 2008.

Intangible Asset

An asset that cannot be touched such as goodwill, copyright, brand name, etc.

Liability

See ‘Accrual’.

Personal Representative

A personal representative is the person or body of persons charged with collecting, administering, and distributing the assets of a deceased person. Excluding assets that, exempt under operational law, pass to some other person on the deceased’s death.

Share

A share is a definite portion of a company’s share capital. Shares represent the shareholder’s interest in or ownership of the company.

Tangible Asset

A tangible asset is one that can be touched such as land, jewellery, antiques and so on.

Taper Relief

A type of relief that reduced gains charged to CGT by tapering them according to the length of time that the asset has been held. Taper relief applies to assets disposed of after 6 April 1998 and was abolished from 6 April 2008.

Tax year

The statistics are aggregated into tax years, which run from the 6th of April until the 5th of April in the following calendar year.

Taxpayer

In the context of CGT, this represents a person who has been charged an amount of CGT.

Trusts

A trust is a way of managing assets (money, investments, land, or buildings) for people. Trusts involve:

• the ‘settlor’ - the person who puts assets into a trust

• the ‘trustee’ - the person who manages the trust

• the ‘beneficiary’ - the person who benefits from the trust

If assets are taken out of a trust, the trustees usually have to pay the tax if they sell or transfer assets on behalf of the beneficiary.

2.5 Statistical unit

The units in the statistics in Tables 1 to 6 are taxpayers who have reported a CGT liability through Self Assessment or the CGT on UK Property service. The units in the statistics in Table 7 are individual assets disposed of by CGT liable taxpayers. In both cases, CGT liable taxpayers include individuals, trusts, and the personal representatives of deceased persons.

The units in the statistics in Table 8 are returns submitted under the CGT on UK property service. Taxpayers who make multiple residential property disposals on different dates in the same tax year are required to file multiple returns under this system.

2.6 Statistical population

The population for the statistics in Tables 1 to 7 is all taxpayers with an overall CGT liability in the relevant year.

The population for the statistics in Table 8 is all persons who have made at least one CGT liable residential property disposal in the tax year and reported it via the CGT on UK Property service, even if they have no overall CGT liability for that year.

The CGT statistics report all liable capital gains except for those reported via the ‘real time’ CGT service and disposals reported by non-UK residents via the CGT on UK Property service. This covers around 99% of all CGT liabilities.

2.7 Reference area

The geographic region covered by the data is the United Kingdom. Table 5 presents a breakdown by UK constituent country and region, all of which operate under the same CGT legislation, rates, thresholds, and allowances.

2.8 Time coverage

The statistics are presented broken down by the month or tax year in which disposals that result in a CGT liability are made.

2.8.1 Self Assessment data

The statistics for overall gains and liabilities in Table 1 cover the time period from the 1987 to 1988 tax year to the 2021 to 2022 tax year. The latter is most recent tax year for which Self Assessment data is available at the time of publication. The statistics in Tables 2 to 6 are also based on Self Assessment data and cover the time period from between 2018 to 2019 and 2021 to 2022. New or updated statistics are only produced for the most recent 4 years in Tables 1 to 6, with updated values produced for the 3 earliest of these years.

From the 2020 to 2021 tax year onwards, tables 1 to 6 also contain information for taxpayers who filed exclusively via the CGT on UK Property service.

2.8.2 Additional information pages sample

The statistics in Table 7 break down disposal proceeds and gains by asset type in the 2020 to 2021 tax year only. These statistics are partly based on the most recent annual sample of the Self Assessment additional information pages, which is available one year later than the Self Assessment data due to additional time required for designing and processing the sample.

2.8.3 CGT on UK Property data

The statistics in Table 8 are based on tax returns submitted through the CGT on UK Property service for the 2020 to 2021 through to the 2022 to 2023 tax years. These are the first years of this service. HMRC receive data from these returns up to a year in advance of the Self Assessment data for the same tax year of disposal.

3. Statistical processing

3.1 Self Assessment data

3.1.1 Source data

The majority of capital gains liable to tax are reported via HMRC’s Self Assessment system. The capital gains for each taxpayer are recorded on either the SA108 (individuals) or SA905 (trusts) tax return sections. The data collected from these returns is used to compile the information presented in Tables 1 to 6.

Taxpayers are expected to report all relevant gains for a given tax year in a single Self Assessment return and can make subsequent amendments to the data they have originally provided. All returns and subsequent amendments that report gains and an overall CGT liability are used in compiling the statistics.

These returns contain a systematic record of a taxpayer’s gains, reliefs, and adjustments and are used by HMRC to establish taxpayers’ CGT liabilities. These liabilities—along with other taxpayer information such as taxable income, age, and address—are also part of information collected via the Self Assessment system.

3.1.2 Frequency of data collection

Taxpayers reporting capital gains via Self Assessment are required to record all relevant disposals made in a given tax year.

Typically, the majority of Self Assessment data for a tax year is received by the Self Assessment filing deadline, which occurs on the 31st of January following the end of the tax year, but it may take several years to receive all assessments and any amendments for a given tax year. For the most recent year presented in Tables 1 to 6, the administrative data used in the statistics includes late and amended Self Assessment returns filed up to the end of May following the Self Assessment filing deadline. The older tax years that are marked as provisional in the previous publication are also updated with the most recent Self Assessment data at this point.

3.1.3 Data collection

Data collected via Self Assessment is stored in HMRC’s analytical warehouses and is then accessed by analysts when producing the statistics. Most returns are filed online and are automatically captured but paper returns and returns filed by trusts are manually entered and stored on the relevant systems.

All capital gains returns were recorded manually before the 1987 to 1988 tax year and only a sample of these were selected as the basis for the published statistics. Since then, returns have been recorded digitally. The statistics up to the 1995 to 1996 tax year were derived from this computer database of returns, supplemented by a small number of manual returns. For all tax years since 1995 to 1996, the statistics are derived from computer records of all Self Assessment returns with a CGT liability. Online filing began in the 1999 to 2000 tax year and is now widely used. At the time of publication, around 97% of returns are filed by this method.

3.1.4 Data validation

The statistics published in Tables 1 to 6 are based on Self Assessment data provided by taxpayers. This administrative data is of a high standard as individuals’ personal Income Tax and CGT liabilities are derived from it.

Analysts with expertise in CGT undertake checks of the monthly updates to data resulting from late and amended returns by evaluating changes in the maximum, minimum, and average values for all data fields. If there are any unexpected changes in these aggregate values from one month to the next, we investigate return forms on an individual level. Records deemed to be incorrect may be adjusted or excluded from the dataset used for the statistics publication.

Quality assurance processes have found that taxpayers commonly fill out the Investors’ Relief (IR) claims box in the Self Assessment SA108 form incorrectly. Typically, taxpayers that complete the form in this way intend to claim Business Asset Disposal Relief (BADR). This does not affect the tax liability for these taxpayers since gains subject to the 2 reliefs are taxed at the same 10% tax rate. To increase reporting accuracy, the statistics for claims of BADR and IR in the 2019 to 2020 tax year onwards published in Table 4 are combined.

On producing the statistical tables, analysts investigate year-on-year trends within the new tables as well as changes from provisional figures reported in past publications. The statistical tables are also compared against other related datasets such as forecasts and CGT revenue received by HMRC.

3.2 Additional information pages sample

3.2.1 Source data

Table 7 is compiled from a stratified sample of the additional information provided by those filing CGT through Self Assessment, as well as administrative data collected from CGT on UK Property returns. This section describes the collection and validation of the Self Assessment additional information sample. The same information on the CGT on UK Property returns can be found in section 3.3 ‘CGT on UK Property data’. The 2 data sources are then combined to produce the estimates presented in Table 7.

The additional information takes the form of attachments showing supporting calculations submitted by taxpayers alongside their CGT Self Assessment return pages. This typically includes all relevant information on every transaction that has an impact on a taxpayer’s final CGT liability. This can include information such as the acquisition and disposal date of each asset, the gain or loss arising from the disposal of each asset, and the type of asset disposed of.

3.2.2 Frequency of data collection

The sample of additional information pages is collected annually and is ready for publication one year later than the Self Assessment data on which it is based. The 2023 publication presents statistics from the sample of additional information on disposals made in the 2020 to 2021 tax year.

3.2.3 Data collection

The sample collected consists of around 5,300 taxpayers with a CGT liability and is stratified by type of taxpayer and size of gain. This represents around 1.5% of all CGT taxpayers in Self Assessment. The stratification design includes 40 strata as follows:

• 10 strata for individuals who are only reporting gains and no losses
• 10 strata for individuals who are reporting both gains and losses
• 10 strata for trusts who are only reporting gains and no losses
• 10 strata for trusts who are reporting both gains and losses

The boundaries for each group of 10 strata are then defined according to the size of the taxpayer’s aggregate gains. The boundaries and stratum sizes are determined using Neyman allocation which optimises the sampling precision by allocating a larger proportion of the sample to strata with higher variability and those that represent a larger proportion of the population.

For the 2020 to 2021 tax year, the sample contained 62,000 assets. Information for these assets is then manually data captured and validated. Variables captured include acquisition and disposal dates, acquisition costs and gains, and the type of asset being disposed of.

Whilst the majority of taxpayers provide additional information, some non-response error is introduced as this element of the tax return is not mandatory (see section 6.3.3 ‘Non-response error’). In addition, the information that taxpayers choose to provide varies and does not always include the information reported in Table 7.

The asset type classifications used in Table 7 for the 2020 to 2021 tax year as published in the 2023 statistics are defined as follows:

• Listed UK and non-UK shares: shares listed on the London Stock Exchange, New York Stock Exchange, NASDAQ, Euronext and Frankfurt stock exchanges as well as any other stock exchanges, non-UK shares in unlisted companies, shares in equity unit trusts and open-ended investment companies, and shares where it is not known if the company is listed or unlisted
• Unlisted UK and non-UK shares: UK shares in unlisted companies.
• Other financial assets: shares listed on the Alternative Investment Market of the London Stock Exchange, shares in non-equity unit trusts and open-ended investment companies, unlisted securities including UK unlisted debentures, fixed interest securities, loan stock, promissory notes, treasury loans, loan notes or bonds, as well as any other financial assets
• Agricultural/commercial/industrial land and buildings: UK and non-UK, non-residential land and property such as farms, stables, barns, shops, pubs, restaurants, hotels, business premisses etc
• Residential/land and buildings: residential property which includes interests in properties which are capable of being used as a domestic residence even if not occupied; interests in land, property, or both being converted into dwellings or not currently being lived in are also classed as residential properties
• Other non-financial assets: other tangible assets such as valuables, jewellery, precious metals, and other intangible assets such as intellectual property, goodwill or licences

Where the asset type is not known but other information reported in Table 7 is available, the available data, such as disposal proceeds and gains, is redistributed across other categories. This includes cases where the asset type is partially known, e.g. where the asset type is not available but it is known that it is financial in nature, the available information will be redistributed across financial assets only.

We have worked with our data providers to implement improvements to the data capture process to improve the structure of Table 7 since the 2021 publication. From the 2022 publication onwards, unlisted shares in non-UK companies and unlisted shares where it is not known whether they relate to a UK or non-UK company are included in “Unlisted UK and foreign shares” instead of “Listed UK and foreign shares”. Shares where it is not known if the company is listed or unlisted are no longer categorised as “Listed UK and foreign shares” and are instead redistributed amongst the listed and unlisted categories.

Due to a substantially higher average number of disposals per taxpayer compared to previous years, the size of the sample for 2020 to 2021 was reduced from approximately 7,500 taxpayers to approximately 5,300. The total number of assets sampled remains high at around 62,000 compared to around 50,000 in the previous publication. This reduced sample size still allows us to obtain reliable results but may result in some additional statistical variability compared to earlier survey datasets.

3.2.4 Data validation

The data used for Table 7 is quality-assured by manual inspection, data validation rules, and by checking against corresponding data recorded in tax return forms where possible.

The data provided in Table 7 is validated at the following stages:

1. During data capture from the sampled pages, the information provided is compared to the values in the main return form boxes where possible. For example, the sum of gains of all assets is compared to the total gains reported in the main return form. Cases where these validation checks are not passed are treated as non-responders.

2. A sample of complex cases is manually validated by an analyst with expertise in data capture. Returns that cannot be validated are corrected if possible or rejected if not.

3. Aggregated values are compared to those produced from samples of previous years to ensure year-on-year changes are within an acceptable margin.

4. The sample is grossed up to the population, and the grossed aggregate gains inferred from the sample are compared with the true population total gains as recorded in Self Assessment return forms. Typically, this shows a sampling error of around 1%.

Because of a small number of outliers, adjustments have been made to the weightings given to some data points for the 2023 publication of Table 7.

3.3 CGT on UK property data

3.3.1 Source data

Persons who dispose of UK residential property where CGT is due are required to file a return via the new CGT on UK Property service within 60 days of completing the disposal. This filing deadline was 30 days for transactions completed between the introduction of the service on 6 April 2020 and 26 October 2021. Before 6 April 2020, UK property disposals were reported through Self Assessment.

Unlike Self Assessment, taxpayers are required to submit multiple returns in a single tax year if they dispose of multiple properties on different dates throughout the tax year. Taxpayers are also able to make subsequent amendments to the data they have originally provided.

Table 8 is compiled from returns submitted through the this service to report disposals. These returns contain information including the number of disposals made, the total taxable gain or loss made on these disposals, the amount of CGT due, and the acquisition and disposal dates.

3.3.2 Frequency of data collection

Under this system, taxpayers can submit multiple returns in a single year if they dispose of multiple properties on different dates. Taxpayers are required to file a return within 60 days of completing a CGT liable residential property disposal rather than by the Self Assessment deadline in the following tax year.

All returns submitted through this system are therefore required to be filed by 5 June following the end of the tax year the transaction was completed in. This means that data for the most recent complete tax year is available by the August statistical publication date. Data included in Table 8 is collated around 2 weeks after the latest possible filing deadline of 5 June, allowing for some information from some late or amended returns to be included for even the last month of disposal in the most recent tax year reported in the publication.

Paper returns received by HRMC up to 2 months before the data capture date may not be present in the data due to the time it takes for them to be manually entered into HMRC’s systems, and for the data to then become available to analysts. Approximately 89% of returns were submitted digitally, rather than by paper, in the 2022 to 2023 tax year.

3.3.3 Data collection

Data collected via the CGT on UK Property system is stored in HMRC’s analytical warehouses and is then accessed by analysts when producing the statistics. Most returns are filed online and are automatically captured whilst paper returns are manually entered and stored on the relevant systems.

The number of disposals and capital gains reported in Table 8 are collated directly from information recorded by taxpayers on the digital or paper returns. For most taxpayers, information provided on the returns is used by HMRC to calculate CGT liability figures. However, for more complex returns and paper returns, the taxpayer is required to calculate and provide their own CGT liability figures and attach supporting calculations to HMRC.

Table 8 is produced using data from all returns submitted by UK residents who have reported at least one CGT-liable residential property disposal in the relevant tax year. The statistics published in Table 8b break down the totals by month based on the disposal dates recorded in each return. Therefore, taxpayers who submitted multiple returns can be included in more than one month.

3.3.4 Data validation

The statistics produced in Table 8 are based on returns data provided by the taxpayer under the CGT on UK Property system. This administrative data is generally of a high standard as individuals’ CGT liabilities are derived from it.

However, some errors which do not affect a taxpayer’s liability can be found on the tax returns. A small number of data points have been omitted from the statistics in Table 8 due to data quality issues resulting from taxpayer errors affecting reported gains.

3.4 Combining data sources

3.4.1 Combining Self Assessment and CGT on UK Property data

The statistics produced in Tables 1 to 6 include data collected from all tax returns filed via Self Assessment as well as returns filed using the CGT on UK Property service.

Self Assessment returns report annualised information for taxpayers’ disposals whereas taxpayers can file multiple CGT on UK Property service returns in a single year to report disposals completed on different dates.

In order to combine the datasets relating to each reporting system, CGT on UK Property returns are aggregated by taxpayer to determine their annual capital gains position on this service. This information is then combined with returns filed via Self Assessment to give full population coverage.

Where a taxpayer has filed via both reporting systems, the information reported via Self Assessment is used as this includes all relevant capital gains made by the taxpayer in a given year.

3.4.2 Combining additional information pages and CGT on UK Property data

The 2023 publication is the first publication in which Table 7 contains information from the CGT on UK Property service, which was introduced on 6 April 2020. Prior to this, all CGT-liable UK property disposals were reported through Self Assessment and were therefore within the scope of the sample of additional information pages.

As detailed in section 3.2, detailed calculations of gains for the annual sample of Self Assessment additional information pages are obtained for each case sampled. Typically, these show the amounts arising from disposals of different types of assets, the period for which they were held, the cost of acquiring each asset, enhancement expenditure (e.g. expenditure on the development of a house), the sale price and cost of disposal, and any other allowances or reliefs.

Equivalent asset-level data is also collected from CGT on UK Property returns submitted by taxpayers who did not also submit a Self Assessment return. There were 28,000 such returns in the 2020 to 2021 tax year.

The 2 data sources are then combined to produce the provisional estimates presented in Table 7. Sample weights and scaling to total gains reported for the tax year are still applied to returns sampled from Self Assessment. No scaling or grossing is applied to the returns filed exclusively via the CGT on UK Property service as data for this entire population is readily available.

Where multiple disposals are reported on a single CGT on UK Property return, the taxpayer is only required to report detailed information relating to one property. In such cases, the information for the other properties reported on the return is imputed. This affects less than 1% of returns reported exclusively via the service in the 2020 to 2021 tax year.

4. Quality management

4.1 Quality assurance

All official statistics produced by HMRC’s Knowledge, Analysis, and Intelligence (KAI) organisation unit must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority and all analysts adhere to best practice as set out in the ‘Quality’ pillar.

Analytical Quality Assurance describes the arrangements and procedures put in place to ensure analytical outputs are error free and fit-for-purpose. It is an essential part of KAI’s way of working as the complexity of our work and the speed at which we are asked to provide advice means there is a high risk of error which can have serious consequences on KAI’s and HMRC’s reputation, decisions, and in turn on peoples’ lives.

Every piece of analysis is unique, and as a result there is no single quality assurance (QA) checklist that contains all the QA tasks needed for every project. Nonetheless, analysts in KAI use a checklist that summarises the key QA tasks, and is used as a starting point for teams when they are considering what QA actions to undertake.

At the start of a project, during the planning stage, analysts and managers make a risk-based decision on what level of QA is required.

Analysts and managers construct a plan for all the QA tasks that will need to be completed, along with documentation on how each of those tasks are to be carried out, and turn this list into a QA checklist specific to the project.

Analysts carry out the QA tasks, update the checklist, and pass onto the Senior Responsible Officer for review and eventual sign off.

4.2 Quality assessment

The Quality Assurance for this project adhered to the framework described in section 4.1 ‘Quality assurance’. The specific procedures undertaken were as follows.

Stage 1 – Specifying the question

Up to date documentation was agreed with stakeholders setting out outputs needed and by when, how the outputs will be used, and all the parameters required for the analysis.

Stage 2 – Developing the methodology

Methodology was agreed and developed in collaboration with stakeholders and others with relevant expertise, ensuring it was fit for purpose and would deliver the required outputs.

Stage 3 – Building a piece of code

Analysis was produced using the most appropriate software and in line with good practice guidance.

Data inputs were checked to ensure they were fit-for-purpose by reviewing available documentation and, where possible, through direct contact with data suppliers.

Quality Assurance of the of the input data was carried out as described in the data validation sections in section 3. ‘Statistical processing’.

The analysis was audited by someone other than the lead analysis, who also has expertise in CGT and data analysis.

Stage 4 – Running and testing the code

Results were compared with those produced in previous years and differences understood and determined to be genuine.

Results were compared with comparable independent estimates, and differences understood. For example, total CGT figures were checked for consistency with other statistical publications.

Results were determined to be explainable and in line with expectations.

Stage 5 – Drafting the final output

Checks were completed to ensure internal consistency. For example, checking that the totals equalled the sum of components, both within and across tables.

The final outputs were independently proof-read and checked by senior expert data analysts outside of the CGT team.

5. Relevance

5.1 User needs

This analysis is likely to be of interest to users under the following broad headings:

• national government – policy makers and MPs
• regional and local governments
• academia and research bodies
• media
• business community
• the general public

5.2 Measuring user satisfaction

A survey of known internal and external users was conducted in the summer of 2011, asking a number of questions about their uses and preferences.

The survey showed that Table 1 was the most frequently used product in the publication. This table shows high-level information on taxpayer numbers, amount of gains, and tax liability for both individuals and trusts, in each tax year, back to 1987 to 1988. The second most used table was Table A1, which shows rates and thresholds for CGT over the same period.

Eight out of twenty respondents in the 2011 user survey asked for breakdowns by gender and region. We added Table 5 in response, which breaks down the number of taxpayers, amount of gain, and amount of CGT by region. This table included trusts in addition to individuals for the first time in the 2021 publication. Breakdowns by sex are also included in Table 1.

Users would clearly wish for revisions to previously published estimates to be as small and as limited as possible. From the 2022 publication onwards, we only revise figures for the 3 most recent tax years as changes to the headline figures in Table 1 for years prior to this would be less than 0.1%. Total gains and taxpayer numbers are typically revised by around 2% each year for the most recent provisional tax year.

Additional user needs that are not being met by the current tables include providing gain amounts before the deduction of taper relief for years prior to the 2008 to 2009 tax year. Providing these gains amounts would mean that they are directly comparable to the currently reported gains time series, however, substantial additional work would be required to calculate these gains values and we consider that the additional cost and burden required outweighs the public interest in providing this information at this time.

We are always open to ideas for new analysis to meet changing user requirements and the published commentary invites users to comment on the statistics and provides an email contact for those wishing to do so.

5.3 Completeness

It is a legal requirement for individuals, trusts, and personal representatives to report all qualifying capital gains to HMRC at the required time. Penalties exist for non-compliance.

Taxpayers can report gains to HMRC via Self Assessment, the CGT on UK Property service or the ‘real time’ CGT service. The CGT statistics reports all tax liable capital gains except for those reported via the ‘real time’ CGT service, and disposals reported by non-UK residents via the CGT on UK Property service. This covers around 99% of all CGT charges and therefore the statistics contained in this report can be considered as sufficiently complete.

6. Accuracy and reliability

6.1 Overall accuracy

Tables 1 to 6 use administrative data based on Self Assessment returns submitted by taxpayers and Table 8 uses administrative data based on returns submitted under the CGT on UK Property system. Accuracy is addressed by eliminating non-sampling errors as much as possible through adherence to the quality assurance framework.

The main risks to accuracy in both of these systems are the same:

• taxpayer error in the completion of the data fields on the return form
• taxpayers whose records are amended after our statistics are produced, for example in response to corrections by HMRC
• taxpayers missing from our latest administrative data due to submitting returns late
• mistakes in the programming code used to analyse the data and produce the statistics

Overall, it is reasonable to expect the administrative data used to be of high quality with minor corrections in subsequent years as individuals’ personal Income Tax and CGT liabilities are derived from it.

Information presented in Table 7 is subject to sampling error as described in section 6.2 ‘Sampling error’.

6.2 Sampling error

Samples are not used to compile the statistics presented in Tables 1 to 6 or in Table 8. All relevant administrative data is used instead and therefore, sampling error is not an issue.

Table 7 is compiled partly from a sample of supporting computations submitted by taxpayers alongside their CGT Self Assessment return pages. As such, there will be sampling variability associated with the numbers presented in this table. However, sampling error is mitigated by a relatively large sample size of around 5,300 Self Assessment taxpayers and the use of stratification and Neyman allocation.

6.3 Non-sampling error

6.3.1 Coverage error

As described in section 2.6 ‘Statistical population’, the population for the statistics in Tables 1 to 7 is all taxpayers with an overall CGT liability in the relevant year. All taxpayers are required to report any capital gains liable to tax to HMRC and can do so via Self Assessment, the CGT on UK Property service or the ‘real time’ CGT service.

The population for the statistics on the CGT on UK Property service is all taxpayers who have made at least one CGT-liable residential property disposal in the tax year, even if they have no overall CGT liability for that year.

The CGT statistics cover all tax liable capital gains except for those reported via the ‘real time’ CGT service, and disposals reported by non-UK residents via the CGT on UK Property service. This covers around 99% of all CGT charges and therefore the statistics contained in this report can be considered as sufficiently complete. As part of our forecasting process for the Office for Budget Responsibility (OBR) we continue to monitor the impact of transactions reported via the ‘real time’ CGT service. We keep the impact of these transactions under review and would consider publishing this information as part of the statistics should they account for an increasing proportion of total CGT liability.

Some paper returns filed near the end of the tax year are not included in the numbers presented in Table 8 for the latest tax year due to the processing time needed for the data to flow into HMRC’s administrative data warehouses. However, these returns will be included in the revised figures in future publications in line with the approach taken in Tables 1 to 6.

Capital gains that are not eligible to tax due to being below the Annual Exempt Amount limit or otherwise are not included in this publication.

6.3.2 Measurement error

The main sources of measurement error could be categorised as respondent errors and include the following:

• taxpayers or their personal representatives may make errors when entering their information onto a CGT return form, whether this is done on paper or electronically
• tax return data from paper returns is subsequently entered into HMRC’s data systems manually, which is another point at which data may be altered due to human error

There is a risk that errors involving returns reporting very large gains, liabilities, or number of disposals may distort the overall statistics. To mitigate this, checks are conducted on the analysis database before the statistics are reproduced and any erroneous data points are excluded.

6.3.3 Non-response error

When analysing tax returns data, figures are not typically available for all taxpayers as some may not have completed their tax return by the required date.

The administrative data used in the statistics includes late and amended Self Assessment returns filed up to 4 months after the 31 January deadline. For CGT on UK Property returns data, this is around 2 weeks after the latest 60-day filing deadline for disposals completed in the stated tax year.

This non-response error is not adjusted for, typically leading to a small underestimate of the total number of taxpayers and amounts of gains and liabilities. However, the 3 most recent years in Tables 1 to 6 are marked as provisional and revised at each publication. Total gains and taxpayer numbers are typically revised by around 2% each year for the most recent provisional tax year.

When filling out the CGT Self Assessment return pages, taxpayers are invited to submit additional pages containing supporting computations, a sample of which is then used to produce the asset-level statistics in Table 7. Whilst the majority of taxpayers provide additional information, some non-response error is introduced as this element of the tax return is not mandatory. In addition, the information that taxpayers choose to provide varies and does not always include the variables reported in Table 7, such as acquisition and disposal dates and asset description. Assets with unknown holding periods are presented separately in Table 7 and data points where the asset type is not known are redistributed across the table. Due to processing resource constraints, additional computation pages submitted as part of a paper return are not sampled and are therefore not reflected in the Table 7 statistics.

The following grossing is applied to estimates derived from the sample:

• grossing to reflect the stratification design
• scaling to account for non-responders
• scaling to account for paper returns not sampled
• scaling to match the total population gains derived from structured Self Assessment returns data

6.3.4 Processing error

It is possible that errors exist in the programming code used to analyse the data and produced the statistics. The risk is reduced through developing a good understanding of the complexities of CGT and thoroughly reviewing and testing the programs and code used.

6.4 Data revision

6.4.1 Policy

The United Kingdom Statistics Authority (UKSA) Code of Practice for Official Statistics requires all producers of Official Statistics to publish transparent guidance on the policy for revisions.

6.4.2 Practice

The statistics produced from Self Assessment and CGT on UK Property service return data (Tables 1 to 6), include estimates for the latest available tax year, along with revisions for the previous 3 years. The revisions for the previous years are normally small but reflect the latest and most accurate position for taxpayers that have provided new information since the previous publication.

Typical revisions made to the total number of taxpayers, amounts of gains, and amounts of tax presented in Table 1 for the last 3 tax years are summarised below:

• most recent year revised: 1.2% to 1.5% increase
• second most recent year revised: 0.1% to 0.4% increase
• third most recent year revised: 0.0% to 0.1% increase

Table 7 is produced from a sample of a single year’s Self Assessment return data. This is not revised due to the manual data entry resource that would be required to update the data.

Table 8 is produced from return forms submitted under the new CGT on UK Property service. Currently this includes information for the 2020 to 2021 through 2022 to 2023 tax years only, as these are the only complete tax years since the system was introduced on 6 April 2020. Information reported through this system is also subject to amendments and revisions which will be reflected in future updates to Table 8. Amendments can also be reported via Self Assessment and these revisions will be reflected in Tables 1 to 6.

6.5 Seasonal adjustment

Seasonal adjustment is not applicable to this analysis.

7. Timeliness and punctuality

7.1 Timeliness

The statistics are aggregated into tax years, which run from 6 April until 5 April in the following calendar year. All tables are published in August, around 16 months after the end of the latest tax year presented in Tables 1 to 6 and around 6 months after the Self Assessment filing deadline for that year. Whilst the bulk of the information compiled in the tables is available in the month following the Self Assessment deadline, further information does continue to become available over the following few months and beyond.

The sample of additional information pages used for Table 7 is drawn around 4 months after the end of the tax year in order to minimise sampling bias by allowing the majority of late and amended tax Self Assessment returns to become available. Additional time is then required for the data capture process that converts the information recorded in taxpayers’ additional information pages into structured data. As a result, the tax year featured in Table 7 is the second most recently available year of Self Assessment data.

Table 8 is populated from returns filed using the CGT on UK Property system where taxpayers were required to file a return within 30 days of completing a CGT liable residential property disposal for transactions completed before the 27 October 2021 and within 60 days for transactions completed thereafter. All returns submitted using this system were therefore required to be filed by 5 May 2021 or earlier for properties disposed of in the 2020 to 2021 tax year, and by 5 June for subsequent years. This means that data for the most recent complete tax year is available by the August statistical publication date. Data included in Table 8 is collated around 2 weeks after the latest possible filing deadline of 5 June, allowing for some late and amended returns information to be included for disposals made in all months reported.

The point at which all statistics are currently published is judged to be a good trade off as virtually all the data has been received and the publication is not too far away from the reference period where possible. If the publication was brought forward to earlier in the year, there would be many missing returns, leading to less reliable statistics being released.

7.2 Punctuality

In accordance with the Code of Practice for official statistics, the exact date of publication will be given not less than one calendar month before publication on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

Any delays to the publication date will be announced on the HMRC National Statistics website.

The full publication calendar can be found on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

8. Coherence and comparability

8.1 Geographical comparability

This analysis is presented for a single country – the United Kingdom. Table 5 presents a breakdown by UK constituent country and region, all of which operate under the same CGT legislation, rates, thresholds, and allowances.

8.2 Comparability over time

In Table 1, users should be aware that the definition of gains is not comparable over the long time series provided (see the multiple definitions of “Gains” in section 2.4 ‘Statistical concepts and definitions’). Only gains from the 2008 to 2009 tax year onwards are reported on a consistent basis.

For Tables 2 to 6, estimates can be compared across all years. However, the Income Tax ranges in Table 3 are amended each year in line with changes to the Income Tax higher rate threshold in England & Northern Ireland.

Table 7 contains data for the latest available tax year only but information for older tax year can be found in previous publications. However, the samples for different tax years are not composed of the same taxpayers so fluctuations in the data across tax years could be reflective of sampling error as opposed to true changes in the composition of the population.

In the 2023 publication, Table 8 provides data for the last 3 tax years, which are the first complete tax years since the introduction of the new CGT on UK Property service.

Similar values to those reported in Table 8 can be found in Table 7 of this publication for the 2020 to 2021 tax year, and equivalent values for earlier tax years can be found in Table 7 in previous publications. However, corresponding numbers in Tables 7 and 8 cannot be used as a time series since they are produced using different data sources and methodologies and cover different segments of the population.

Where applicable, changes to definitions of the statistics provided for different tax years are covered in the publication commentary each year.

8.3 Coherence – cross domain

HMRC’s trust statistics publication reports comparable statistics on capital gains and tax reported and paid by trusts. Differences between the information presented in the 2 publications is due to the following factors:

• trusts’ gains reported in the CGT statistics are presented before the deduction of the Annual Exempt Amount (AEA) whereas gains are reported net of the AEA in the trust statistics publication

• CGT liabilities are presented on the same basis in both publications, but numbers are subject to small differences due to the different timing of the publications and the inclusion of additional late and amended Self Assessment returns

8.3.1 Sub-annual and annual statistics

All statistics are presented as annual outputs. No coherence issues relating to this category exist.

8.3.2 National accounts

All tax figures in these statistics relate to CGT liabilities accrued in the specified time period (accruals). These liabilities represent the tax due to HMRC as calculated using information reported in tax returns. Whist both the HMRC CGT National Statistics and the ONS national accounts are produced on an accruals basis, the accruals methodology used by the ONS is different to that used in this publication. In the ONS UK public sector finances (PSF) publication, cash receipts are used as a proxy for accruals, that is, CGT receipts are not time-adjusted once received from HMRC.

8.4 Coherence - internal

The rounding of estimates may cause some minor internal coherence issues as the total within a table may not sum to the displayed total. Effort has been made to ensure totals between tables remain constant where appropriate. For example, the total in Tables 2, 3, 5, 6, and 7 match the figures given in Table 1 for the respective tax years.

Tables 7 and 8 in the 2023 publication contain information on the number of residential property disposals and gains for residential property for the same tax year. However, the figures in both tables are not directly comparable. Table 8 includes only information on disposals reported through the CGT on UK Property service whereas Table 7 also covers residential property disposals reported exclusively via Self Assessment.

9. Accessibility and clarity

9.1 News release

There are no press releases linked to this publication over the past year.

9.2 Publication

The tables and associated commentary are published on the Capital Gains Tax statistics webpage of GOV.UK.

Tables are published in the Open Document format, and the associated commentary and supporting documentation as accessible HTML webpages. This includes descriptions of the data and the methodology used, along with a glossary and descriptions of recent changes to CGT.

All documents comply with the accessibility regulations set out in the Public Sector Bodies (Websites and Mobile Applications) (No. 2) Accessibility Regulations 2018.

Further information can be found in HMRC’s accessible documents policy.

9.3 Online databases

This analysis is not used in any online databases.

9.4 Micro-data access

Access to the data used in this publication is available through HMRC’s Datalab, which allows approved researchers to access de-identified HMRC data in a government accredited secure environment.

9.5 Other

There are no other dissemination formats available for this analysis.

9.6 Documentation on methodology

A document providing commentary and key findings of the statistics is publicly available to users in the documents list of the Capital Gains Tax statistics webpage on GOV.UK.

This document describes the methodology used to produce these statistics. It replaces the previously published ‘Background Quality Report: Capital Gains Tax statistics’.

9.7 Quality documentation

All Official Statistics produced by HMRC must meet the standards set out in the ’Code of Practice for Statistics’ produced by the UK Statistics Authority (UKSA) and all analysts adhere to best practice as set out in the ‘Quality’ pillar.

10. Cost and burden

There is no additional burden on taxpayers as all information used is taken from data that taxpayers are already required to provide by law through their obligation to fill in a tax return with the appropriate pages completed.

Table 7 is compiled from a sample of additional information pages submitted by taxpayers alongside their main CGT return. This sample is drawn and converted into structured data to meet HMRC’s ongoing business needs which include the publishing of National Statistics.

It is estimated that it takes around 30 days FTE to produce the annual analysis and publication.

11. Confidentiality

11.1 Policy

HMRC has a legal duty to maintain the confidentiality of taxpayer information.

Section 18(1) of the ‘Commissioners for Revenue and Customs Act 2005’ (CRCA) sets out our duty of confidentiality.

This analysis complies with this requirement.

11.2 Data treatment

The statistics in these tables are presented at an aggregate level so the identification of individuals or trusts is not possible.

To ensure that no individual taxpayers or customers can be identified, statistical disclosure control (SDC) is applied to the cells within the tables. SDC is the application of method to ensure confidential data is not disclosed to parties who do not have the authority to access it.

SDC modifies published data so that the risk of data subjects being identified is within acceptable limits while making the data as useful as possible.

Disclosure in this analysis is avoided by applying rules that prevent categories of data containing:

• small numbers of contributors, and
• small numbers of contributors that are very dominant

If a cell within a table is determined to be disclosive, its contents are suppressed either by removing the data or—as done in this publication—combining categories.

Further information on anonymisation and data confidentiality best practice can be found on the Government Statistical Service’s website.

Annex A. CGT policy history

The CGT regime has changed significantly since it was first introduced in 1965. Some of the most important changes are presented below in reverse chronological order.

2024

The Annual Exempt Amount (AEA) for CGT will be reduced to £3,000 for individuals, personal representatives and some types of trusts, and £1,500 for most trusts.

2023

The Annual Exempt Amount (AEA) for CGT is reduced to £6,000 for individuals, personal representatives and some types of trusts, and £3,000 for most trusts. This change supersedes the AEA freeze announced at Spring Budget 2021.

The CGT proceeds reporting limit is fixed at £50,000

From 6 April 2023, changes were made to the rules that apply to transfer of assets between separating spouses and civil partners. These changes provide that they be given up to 3 years in which to make no gain/no loss transfers of assets between themselves when they cease to live together; and unlimited time if the assets are the subject of a formal divorce agreement.

2021

At Spring Budget 2021, it was announced that the Annual Exempt Amount (AEA) for CGT would be maintained at 2020 to 2021 levels until the 2025 to 2026 tax year. The AEA over this period would be 12,300 for individuals, personal representatives and some types of trusts, and at £6,150 for most trusts. This policy was superseded for the 2023 to 2024 tax year onwards by the AEA reduction described in the 2024 section above.

The time limit for filing CGT returns and making associated payments on account when disposing of UK land and property was extended from 30 days to 60 days for transactions completed on or after 27 October 2021. The extension applies to disposals made by both UK residents and non-UK residents.

2020

From 6 April 2020 individuals, trustees and personal representatives of deceased persons who sell or otherwise dispose of residential property where CGT is due on all or part of the gain must report the disposal to HMRC within 30 days of completing the disposal, and at the same time make a payment on account of the CGT due.

From 11 March 2020, the Entrepreneurs’ Relief lifetime limit was reduced to £1 million.

From 6 April 2020 Entrepreneurs’ Relief has been renamed Business Asset Disposal Relief.

2019

From 6 April 2019, the minimum period throughout which the qualifying conditions for Entrepreneurs’ Relief must be met was extended from 12 months to 24 months.

Also, individuals whose shareholding is ‘diluted’ below the 5% qualifying threshold for Entrepreneurs’ Relief as a result of a new share issue were allowed to obtain relief for gains up to that time.

From 2019, non-resident individuals, trustees and companies making disposals of UK property after 5 April 2019, became liable to CGT. Only gains that accrue on those properties from 6 April 2019 are liable to CGT.

2018

From 29 October 2018, in addition to existing qualifying conditions for Entrepreneurs’ Relief, shareholders are also required to be entitled to either at least 5% of the distributable profits and net assets of a company or at least 5% of the proceeds in the event of a company sale to claim the relief.

2016

The main CGT rates were reduced from 18% and 28% to 10% and 20% respectively, except for gains on carried interest (investment profit rewards for investment managers) and residential property.

A new Investors’ Relief was introduced. It applies a 10% rate of CGT to gains accruing on the disposal of ordinary shares in an unlisted trading company held by individuals, that were newly issued to the claimant and acquired for new consideration on or after 17 March 2016, and have been held for a period of at least 3 years starting from 6 April 2016. A taxpayer’s qualifying gains for Investors’ Relief are subject to a lifetime cap of £10 million.

2015

Non-resident individuals, trustees and certain other types of owner, making disposals of UK residential property after 5 April 2015, became liable to CGT on gains on these properties, which accrued from 6 April 2015.

2014

The Seed Enterprise Investment Relief was made permanent at the 50% rate. Social investment tax relief was introduced which for qualifying investments in social enterprises, gave a deferral of the CGT charge on the invested gains. Also, after holding such investments for 3 years or more, disposals of qualifying investments were free of CGT. The Annual Tax on Enveloped Dwellings (ATED) was extended to residential properties valued more than £500,000 (with rates applying depending on the band range) with the CGT charge on disposal now also applying to enveloped residential properties more than £500,000.

Where a person owns one or more properties that have been their main residence they are entitled to relief from CGT on the final period of ownership if they dispose of a property they are not currently living in. The change made for contracts exchanged on or after 6 April 2014 reduced the period of ownership for which this relief was available from 36 months to 18 months.

2013

There were a number of measures announced in the 2013 Budget. One of the major changes, affecting qualifying share disposals from 6 April 2013, was announced in the 2012 Budget, and extended Entrepreneurs’ Relief to cover gains made through the extension of Enterprise Management Initiative options to those qualifying share disposals. Seed Investment Relief was extended to the 2013 to 2014 tax year but only 50% relief was given. Relief was available against CGT chargeable on gains realised in that tax year and reinvested in qualifying companies in either that or the follow tax year. Announced at Budget 2012, but applying from April 2013, was a new tax on residential properties valued at more than £2 million held in corporate envelopes (the Annual Tax on Enveloped Dwellings, ATED) with a CGT charge of 28% on gains made on disposal of enveloped properties since April 2013. The CGT charge also applied from April 2013.

Employee Shareholder Status was a new employment status that was introduced on 1st September 2013, affecting CGT as well as Income Tax and National Insurance contributions. Employers can issue employees with fully paid shares in their company or parent company in exchange for the employee forfeiting certain employment rights.

To participate in the scheme, the company must award the employee shares worth at least £2,000 in return for surrendering agreed employment rights. Companies are able to impose restrictions such as preventing the employee from selling their shares for a certain period of time. These have the effect of reducing the market value of the shares and it is this ‘restricted’ actual value that needs to be at least £2,000 if the individual is to be an employee shareholder.

Additional benefits for the employee shareholder include an exemption from paying Income Tax and National Insurance Contributions on the value of shares up to £2,000 on acquisition and an exemption from paying CGT on shares worth up to £50,000 at award when sold. Budget 2016 announced a lifetime limit of £100,000 on the CGT exempt gains that a person can make on the disposal of shares acquired under employee shareholder agreements entered into after 16 March 2016. Autumn Statement 2016 announced that the tax advantages associated with employee shareholder status will be abolished for all arrangements entered into from 1 December 2016, but existing shareholders would continue to benefit.

2012

The Annual Exempt Amount for the 2012 to 2013 tax year was frozen for individuals at £10,600, the level of the allowance for the previous year. A new relief, Seed Enterprise Investment Relief, was introduced to help small, early-stage companies to raise equity finance by offering a range of tax reliefs (including CGT if conditions apply) to individual investors who purchase new shares in those companies. This relief applies to shares issued on or after 6 April 2012.

2011

Further reforms were made to the CGT regime announced at Budget 2011. Entrepreneurs’ Relief was extended to £10m of gains over a lifetime from 6 April 2011.

2010

In March 2010 the limit for Entrepreneurs’ Relief was extended to cover the first £2m of lifetime gains. The lifetime limit for Entrepreneurs’ Relief was extended to cover the first £5m of lifetime gains for disposals after 23 June 2010.

The 2010 Finance Act introduced a further reform of CGT during the 2010 to 2011 tax year in line with the June 2010 budget. For individuals whose total taxable income and gains after all allowable deductions (including losses, the Income Tax personal allowance and the CGT AEA) are less than the upper limit of the basic rate Income Tax band (£37,400 for the 2010 to 2011 tax year), the rate of CGT will be 18%. For gains (and any parts of gains) above that limit the rate will be 28%. For trusts and personal representatives of deceased persons, the rate will be 28%. Where Entrepreneurs’ Relief applies for individuals or trusts the rate remains 10%.

2008

A single CGT rate of 18% was introduced for individuals, trusts and personal representatives of deceased persons. The Annual Exempt Amount, which exempts gains up to a limit, remained in place but taper relief and indexation allowance were withdrawn.

A new Entrepreneurs’ Relief was made available to individuals and certain trusts. Entrepreneurs’ Relief allows individuals and some trusts to claim relief on qualifying gains made on the disposal of any of the following:

• all or part of a business
• the assets of a business after it has stopped trading
• shares in a company

This relief provided an effective 10% rate on the first £1 million of lifetime gains of qualifying disposals. This was lowered to £1m on 11 March 2020.

2004

The definition of business assets for taper relief was again extended to cover all assets used wholly or partly for the purposes of an individual’s trade irrespective of whether the owner was involved in carrying on the trade concerned. Also, the rate applicable to trusts was increased to 40%.

2002 and 2003

The taper rates for business assets were modified so that the taper matured after 2 years rather than 4.

In both 2002 and 2003 there were a number of simplification measures.

2001

The definition of business assets for taper relief was further extended, with effect from 6 April 2000, to employees disposing of shares in non-trading companies where they work so long as they do not have a material interest of more than 10% in the company.

2000

Taper rates for business assets were modified so that the taper matured after 4 years instead of 10 and the definition of business assets was widened. Business assets acquired before 17 March 1998 no longer qualified for the bonus year in calculating the appropriate taper relief fraction to apply to gains.

CGT rates were fully aligned with the Income Tax rates on savings income to include the starting rate of 10%.

1998

Indexation was withdrawn for periods of ownership after April 1998. Instead chargeable gains were tapered according to the length of time that the asset has been held after 5 April 1998. The taper was more generous for business assets than for non-business assets; both taper rates are shown in Table A1. Assets acquired before 17 March 1998 qualified for an addition of 1 “bonus” year to the period for which they are treated as held after 5 April 1998. The taper was applied to net gains that were chargeable after the deduction of any allowable losses. Losses were set against gains in the order that produces the lowest tax charge. Also, the rate applicable to trusts was extended to include interest in possession trusts and personal representatives, previously chargeable at the standard rate.

1993

Since November 1993, it has not been possible to use Indexation Allowance to create or increase a capital loss.

1988

The cost of assets held on 31 March 1982 was ‘rebased’ to their market value at that date to ensure that gains accruing before then were not charged to tax. In that year, the rate of CGT was aligned with the rates for Income Tax. Capital gains were thereafter, in broad terms and after deducting any allowances and reliefs available, taxed as if they were the top slice of an individual’s income.

1982

Indexation Allowance was introduced. This allowance is the difference between the cost incurred and the same costs indexed by the Retail Prices Index.