National statistics

Capital Gains Tax commentary

Updated 3 August 2023

Key points

Record amounts of capital gains and tax were recorded in the 2021 to 2022 tax year. The total amount of Capital Gains Tax (CGT) liability was £16.7 billion for 394,000 taxpayers. This liability was realised on £92.4 billion of gains. Both the total CGT liability and the amount of gains have increased by 15% from the previous year, while number of taxpayers has increased by 20%.

These increases are partly explained by the increases in the number of taxpayers, gains, and tax in residential property disposals—as detailed in Table 8—and other asset types.

Most CGT comes from the small number of taxpayers who make the largest gains. In the 2021 to 2022 tax year, 45% of CGT came from those who made gains of £5 million or more. This group represents less than 1% of CGT taxpayers each year.

In the 2021 to 2022 tax year, broadly speaking, as income and size of gain increased, the number of individual taxpayers decreased. In that year, 45% of gains for CGT-liable individuals came from the 12% of individuals with taxable incomes above £150,000, the additional rate threshold for Income Tax.

7% of CGT came from CGT disposals that qualified for Business Asset Disposal Relief (BADR). BADR was claimed by 47,000 taxpayers on £12.6 billion of gains in the 2021 to 2022 tax year, resulting in a total tax charge of £1.2 billion.

London and the South East of England accounted for around half of total gains (49%) and tax liability (51%) in the 2021 to 2022 tax year. These figures are broadly constant over time and there is a stable regional distribution overall.

More detailed information is now available for the 2019 to 2020 tax year. In that year CGT taxpayers disposed of 2 million assets worth £198.4 billion and realised gains of £80.7 billion. Financial assets accounted for 92% of the number of disposals, 81% of total disposal proceeds, and 84% of total gains.

The Capital Gains Tax on UK property service was used by 139,000 taxpayers to report 151,000 disposals of residential property in the 2022 to 2023 tax year for a total liability of £1.8 billion. These figures are similar to the figures from the 2021 to 2022 tax year, which in turn showed a 56% and 60% increase in the number of disposals and total liability from the 2020 to 2021 tax year. This increase from the 2020 to 2021 tax year reflects a wider increase in activity in the residential property market following the first year of the COVID-19 pandemic. It may also reflect more people using the Capital Gains Tax on UK property service since its introduction in the 2020 to 2021 tax year.

About this release

This publication is the annual update of the Capital Gains Tax National Statistics. The statistics include information on the number of capital gains taxpayers, capital gains, tax liabilities, and Business Asset Disposal Relief and Investors’ Relief taken from Self Assessment returns, as well as breakdowns by size of gain, taxable income, region, and age up to the 2021 to 2022 tax year. Only information from taxpayers who have a Capital Gains Tax liability is included in the publication.

Updates have been made to the previous provisional figures and new figures added for the 2021 to 2022 tax year.

Breakdowns by holding period and type of asset disposed of are also provided for the 2020 to 2021 tax year from sample information. The publication also includes statistics on the Capital Gains Tax on UK property service, including new information on residential property disposals made in the 2022 to 2023 tax year and updating provisional figures for the previous two tax years.

Data sources, definitions, and methods are described in more detail in the Background Quality Report.

Commentary

This section provides the headline statistics about Capital Gains Tax (CGT) taxpayers. Tables 1 to 6 are based on Self Assessment (SA) returns with a CGT liability, including information for the 2021 to 2022 tax year. Table 7 is based on a sample of asset-level information from SA returns submitted for the 2020 to 2021 tax year. Table 8 is based on returns submitted under the new Capital Gains Tax on UK property service for the 2020 to 2021 through 2022 to 2023 tax years.

Taxpayer numbers, gains and tax liabilities - Table 1

Table 1 and Figures 1 and 2 show the long-term trend in key statistics for Capital Gains Tax.

Record amounts of capital gains and tax were recorded in the 2021 to 2022 tax year. The total amount of tax liability was £16.7 billion, and this was an increase of 15% from the 2020 to 2021 tax year. The total amount of gains was £92.4 billion: an increase of 15% from the previous year.

The number of taxpayers increased by 20% when compared with the previous year to an all-time high of 394,000. This total is around one percent of the number of people who pay Income Tax.

While this only explains part of the total increase between these years, Table 8 shows that there were large increases in the amount of gains and tax and the number of taxpayers disposing of residential property.

From 11 March 2020, the lifetime limit of gains eligible for Business Asset Disposal Relief (BADR) (formerly known as Entrepreneurs’ Relief) was reduced from £10 million to £1 million. This meant that where a taxpayer had made disposals which met the qualifying conditions for the relief, and where the resulting gains fell above the £1 million lifetime limit, the excess gains were charged at the main CGT rates. This contributes to some of the increase in CGT liabilities in the 2020 to 2021 tax year as gains were charged at a higher tax rate under the new rules. More information on BADR can be found in Table 4.

In addition, in November 2020 the Office of Tax Simplification published a report on Capital Gains tax in which they made a recommendation to government to ‘consider more closely aligning Capital Gains Tax rates with Income Tax rates’. As a result of these recommendations, some of the increase in gains and CGT in the 2020 to 2021 tax year could reflect taxpayers bringing forward disposals in response to anticipated tax rises. These recommendations were not implemented.

Figure 1 shows the amount of capital gains and tax liabilities by year of disposal from Table 1, which covers the period between the 1987 to 1988 and 2021 to 2022 tax years. The main changes to CGT highlighted in Figure 1 are as follows:

• 1999 to 2000: CGT rates partially aligned with rates on savings income

• 2000 to 2001: Taper Relief now matures after 4 years

• 2002 to 2003: Taper Relief now matures after 2 years

• 2008 to 2009: single 18% rate, Entrepreneurs’ Relief replaces Taper Relief and the indexation allowance is withdrawn

• 2010 to 2011: higher CCT rate of 28% introduced

• 2016 to 2017: rates reduced to 10% and 20% except for gains on carried interest and residential property

• 2020 to 2021: the Business Asset Disposal Relief lifetime limit was reduced from £10m to £1m and lifetime gains above £1m were charged at the main CGT rates

Further details on past changes to CGT can be found in Annex A of the Background Quality Report.

Figure 2 shows the number of taxpayers liable to Capital Gains Tax by year of disposal from Table 1, which covers the period between the 1987 to 1988 and 2021 to 2022 tax years.

Methodology - Definition of gains over time

In Table 1 users should be aware that the definition of gains is not comparable over the long time series provided. Only gains from the 2008 to 2009 tax year onwards are reported on a consistent basis.

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

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

• Gains between the 1998 to 1999 tax year and the 2007 to 2008 tax year are not comparable to subsequent years. This is because taper relief was abolished in the 2008 to 2009 tax year. Taper relief reduced the gains which were taxable by a percentage which was determined by how long the asset had been held.

Size of gain - Table 2

Tables 2.1 to 2.4 give a further breakdown of the figures in Table 1 by size of capital gain for the most recent four tax years. Trusts and individuals are both included in these tables.

Most Capital Gains Tax (CGT) comes from the relatively small number of taxpayers who make the largest gains. In the 2021 to 2022 tax year, 45% of CGT came from those who made gains of £5 million or more. This proportion remains unchanged from the 2020 to 2021 tax year. This group represents less than 1% of CGT taxpayers each year. By comparison, the top 1% of Income Tax payers in the 2021 to 2022 tax year paid 30% of all Income Tax.

One third of CGT taxpayers have gains under £25,000 and this group contributes around 1% of total CGT.

There were increases in gains and tax between 2020 to 2021 and 2021 to 2022 in all gain bands, with the £5 million and above category contributing to 45% of the total increase.

Size of gain by income - Table 3

Tables 3.1 to 3.4 show the distribution of taxpayer numbers and gains broken down by size of capital gain and taxable income for individuals. These tables do not include trusts.

There is a pattern to the distribution, with larger numbers of individuals making smaller gains falling into the lower income categories, and as income and size of gain increase, the number of taxpayers decreases. Individuals making large gains are also more likely to have higher incomes—of all individuals with gains in excess of £1 million, more fall into the highest income range than any other income category.

In the 2021 to 2022 tax year, individuals with gains under £50,000 and taxable income below £37,700 contributed 4% of the total gains and represented 38% of those liable to Capital Gains Tax (CGT). In this year, 45% of gains for individuals came from the 12% of CGT-liable individuals with taxable incomes above £150,000—the additional rate threshold for Income Tax. Furthermore, 39% of overall gains were made by those with gains in excess of £1 million and income in excess of £150,000. This group represents less than 2% of individuals liable to CGT.

The amount of taxable income as presented in Table 3 cannot be directly used to determine a taxpayer’s Income Tax band. However, it is sufficient to allow us to see that higher and additional rate taxpayers tend to realise greater gains than those with lower taxable incomes. In the 2021 to 2022 tax year, around 14% of individuals paying Income Tax were higher rate taxpayers, whereas 27% of CGT-liable individuals had a taxable income of between £37,700 and £150,000. Approximately 1% of individuals paying Income Tax were additional rate taxpayers, whereas 12% of CGT-liable individuals had a taxable income greater than £150,000.

Business Asset Disposal Relief and Investors’ Relief – Table 4

Tables 4.1 to 4.4 show the distribution of Business Asset Disposal Relief and Investors’ Relief claims broken down by size of capital gain for individuals and trusts.

The 2019 to 2020 tax year was the first year that we saw claims of Investors’ Relief, first introduced in 2016. Investors’ Relief claims make up only a very small proportion of the totals presented in the tables.

From 6 April 2020 Entrepreneurs’ Relief was renamed Business Asset Disposal Relief (BADR).

There were 47,000 BADR claimants in the 2021 to 2022 tax year and this number has remained stable in the most recent four years.

In that year, BADR was claimed on £12.6 billion of gains, resulting in a total tax charge of £1.2 billion, which represents increases of 5% and 6% on the previous year respectively. The group of taxpayers making the maximum possible BADR claim of £1 million is responsible for most of these increases, with decreases seen in most other gain bands.

Gains eligible for BADR are concentrated amongst individuals who have larger gains. Around two thirds of gains and tax paid at the BADR rate came from the 21% of individuals with qualifying gains of £500,000 or more.

Both the amount of gains on which the relief was claimed on, and the amount of tax charged at the BADR rate decreased by around 60% between the 2019 to 2020 and 2020 to 2021 tax years due to the reduction of the relief’s lifetime limit from 11 March 2020.

Approximately 7% of the total Capital Gains Tax in the 2021 to 2022 tax year came from disposals qualifying for BADR, a decrease from 8% in the previous year.

Trusts have historically made up a small percentage of the BADR tax liability. In the 2021 to 2022 tax year, trusts accounted for less than 1% of total gains and tax paid at the BADR rate.

Methodology - Definition of gains in 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 tax return.

Changes to Table 4

To reflect the Business Asset Disposal Relief (BADR) lifetime limit reduction from £10 million to £1 million at the start of the 2020 to 2021 tax year, Tables 4.1 and 4.2 do not include a further breakdown for disposals with gains larger than £1m. The highest gain category for that year now includes BADR claims with gains of exactly £1 million and IR claims with gains of £1 million and above. The statistics for claims of BADR and IR presented in Tables 4.1 and 4.2 are combined. This is to improve reporting accuracy to account for cases where information provided by the taxpayer cannot be used to determine which of the two reliefs are being claimed. This is discussed in further detail in the Background Quality Report.

Regional and country statistics - Table 5

Tables 5.1 to 5.4 show the amount of gains and tax liabilities for individuals by region and UK country. This table is based on the postcode of the residence of the individual, and therefore not necessarily the location of the asset which has been disposed.

In all years presented, the South East of England and London had the highest number of capital gains taxpayers. Taken together, London and the South East of England made up 39% of individuals who were liable to Capital Gains Tax in the UK in the 2021 to 2022 tax year. The North East of England and Northern Ireland had the fewest taxpayers.

London and the South East of England accounted for approximately half of the total gains (49%) and tax liability (51%) in the 2021 to 2022 tax year. These figures are broadly constant over time and overall, there is a stable regional distribution.

Age statistics - Table 6

Tables 6.1 to 6.4 show the number of taxpayers and amounts of gains and tax by age category.

The 55 to 64 age group has consistently had the highest number of capital gains taxpayers and, along with the 45 to 54 age group, having the highest gains and liabilities. These two age groups represented 47% of the Capital Gains Tax population and contributed 60% of the gains and tax in the 2021 to 2022 tax year. The oldest and youngest two age categories have the least amounts of gains and tax in this year, and this pattern is consistent throughout the period covered in the tables.

Statistics by asset type in the 2020 to 2021 tax year - Table 7

Tables 7.1 to 7.7 show the number of disposals, disposal proceeds and gains arising in the 2020 to 2021 tax year.

Table 7.1 shows that in total, Capital Gains Tax (CGT) payers disposed of 2 million assets worth £198.4 billion with gains of £80.7 billion in the 2021 to 2021 tax year. This reflects the number of assets being disposed of almost doubling compared to 2019 to 2020, as well as a 37% increase in disposal proceeds and a 21% increase in gains from the previous year.

As noted in the section on Table 1 above, both the reduction in the lifetime limit for gains qualifying for Business Asset Disposal Relief and the November 2020 recommendation by the Office of Tax Simplification to ‘consider more closely aligning Capital Gains Tax rates with Income Tax rates’ contributed to the increase in gains and CGT in the 2020 to 2021 tax year.

Financial assets

In the 2020 to 2021 tax year, financial assets accounted for 92% of all disposals, 81% of the total disposal proceeds and 84% of total gains, and these proportions have increased from the previous year.

Almost all of the increase in the number of CGT-liable disposals in the 2020 to 2021 tax year was due to more financial assets being sold. The number of financial assets disposed of was 1.83 million, a 109% increase from the previous year.

The disposal proceeds and gain amounts for financial assets were £161.4 billion and £67.7 billion, which are 44% and 24% increases on the previous year’s values respectively. The number of disposals, disposals proceeds and gains all increased for all financial asset classes reported in the table.

Unlisted shares accounted for 61% of gains made on financial assets but only 13% of disposals and 34% of disposal proceeds in this category. Gains as a percentage of disposal proceeds for unlisted shares are particularly high at 75%.

Non-financial assets

Residential land and buildings were the largest component of non-financial assets and accounted for 84% of the number of all assets disposed of, 78% of the total value of all disposals, and 63% of gains across this category. The number of residential property disposals, disposals proceeds and gains all increased on the previous year.

Holding periods

Of assets with known holding periods, 82% of listed shares and 68% of unlisted shares were sold within the first five years. Both percentages are higher than the proportion of residential land and buildings, and commercial and agricultural land and buildings held for less than five years, at 17% and 20% respectively.

Similarly, the median average holding period for both listed and unlisted shares is between one and two years. For agricultural, commercial or industrial land and buildings the median holding period is between 15 and 20 years, and between 10 and 15 years for residential land and buildings.

Methodology - Table 7

Table 7 is based on information on taxpayers with a Capital Gains Tax (CGT) liability which is derived from an annual stratified sample of additional information pages submitted alongside Self Assessment capital gains schedules, as well as administrative data collected from Capital Gains Tax on UK Property returns.

For the annual sample of Self Assessment additional information pages, detailed calculations of gains 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. The total capital gains value estimated from the sample is then scaled to match the total capital gains of all CGT Self Assessment returns for the tax year.

Equivalent asset-level data is also collected from 28,000 Capital Gains Tax on UK property returns submitted by taxpayers who did not also submit a Self Assessment return.

Using experimental methodology, the two data sources are then combined to produce the provisional estimates presented in Table 7. The data capture process and statistical methodology are described in more detail in the Background Quality Report.

All percentages quoted in the commentary relating to holding periods are for where the holding period is known; assets with unknown holding periods are taken out of the percentage calculation.

Changes to Table 7 in 2023 publication

The 2023 publication is the first publication in which Table 7 contains information from the Capital Gains Tax 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. The process for including this new data source is experimental, and Table 7 estimates for the 2020 to 2021 tax year are provisional and subject to revision due to potential methodological refinements. The change is described in more detail in the methodology section above as well as the Background Quality Report.

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. This sample size allows us to obtain reliable results but may result in some additional statistical variability compared to earlier survey datasets. The total number of assets for which information was captured remains high at around 62,000 compared to around 50,000 in the previous publication.

Table 7 and Table 8 comparison

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 Capital Gains Tax on UK Property service whereas Table 7 also covers residential property disposals reported exclusively via Self Assessment. More information on the data sources used in the production of these tables is available in the Background Quality Report.

Statistics on UK residential property - Table 8

From 6 April 2020, individuals, trustees and personal representatives of deceased persons who sell or otherwise dispose of UK residential property where Capital Gains Tax (CGT) is due on all or part of the gain have had to 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. The filing deadline was extended from 30 days to 60 days for transactions completed on or after 27 October 2021.

Table 8a - Total

Tables 8a.1 to 8a.3 show the number of taxpayers who have reported a tax liability using the CGT on UK property service for the tax years 2020 to 2021 through 2022 to 2023. The tables also show the total gains and tax liabilities reported through this service as well as the number of returns submitted and disposals made.

For the 2022 to 2023 tax year, 139,000 taxpayers reported CGT-liable residential property disposals via the service, filing 147,000 returns and reporting 151,000 disposals. The total gains and total liability reported are £9.1 billion and £1.8 billion respectively. All of these figures are similar to the equivalent numbers from the 2021 to 2022 tax year, although they are likely to increase in the future due to late filing.

On the other hand, the 2021 to 2022 tax year shows an increase in total gains and total liability of 59% and 60% respectively from the 2020 to 2021 tax year. This is mainly driven by increases to the number of taxpayers using the service (62%) and the number of disposals reported (56%).

This reflects a wider trend in the residential property market, which saw an increase in the number of transactions following the first year of the COVID-19 pandemic. However, we do not see corresponding decreases in the 2022 to 2023 tax year in Table 8, which may in part be due to increased uptake of the Capital Gains Tax on UK Property service.

Some residential property disposals are reported exclusively via Self Assessment in the years presented in the table. Information associated with these disposals is not reflected in Table 8 but is included in the totals for Tables 1 to 7 for the 2020 to 2021 and 2021 to 2022 tax years.

Table 8b - Month of Disposal

Tables 8b.1 to 8b.3 show the data for each tax year broken down by month of disposal.

Broadly speaking, the number of taxpayers and disposals, and the amounts of gains and tax increased over the course of the 2020 to 2021 tax year. The largest driver behind this pattern is expected to be the impact of COVID-19 and related policy measures on the property market. For example, reduced rates of Stamp Duty Land Tax (SDLT) applied for residential properties purchased from 8 July 2020 until 30 June 2021. This is also strongly reflected in the high number of disposals in June 2021. A sharp increase in transactions can also be observed in September 2021 as reduced SDLT rates on purchases also applied from 1 July 2021 to 30 September 2021.

Wider residential property trends are discussed in the Quarterly Stamp Duty Land Tax statistics.

Methodology - Table 8

The statistics in Table 8 are based on returns submitted using the Capital Gains Tax (CGT) on UK property service. The tables are produced using data from all returns submitted by UK residents who have reported at least one CGT-liable residential property disposal in the tax year presented by the individual table.

The number of disposals in Table 8 may not be equal to the total number of properties disposed of. This is because multiple taxpayers can report a disposal of their share of a jointly owned property is separate tax returns.

The number of reported disposals and associated statistics in this table are subject to change due to:

• the inclusion of late and amended returns

• changes to gains and liabilities figures following the submission of Self Assessment returns by customers with other capital gains, losses, and reliefs

• changes to income estimates that affect CGT rates charged

• any methodological updates

A small number of data points have been omitted from the statistics due to data quality issues.

Contact details

Statistical contacts

M Minev, T Penny

Media contact

news.desk@hmrc.gov.uk

Publication date

3 August 2023

Next publication date

August 2024

Frequency

Annual

UK Theme

Economy