# Government collects record capital gains tax as 181,000 more pay up

By Sarah Coles — 2026-08-27

Sarah Coles, head of personal finance at AJ Bell, explains why the government collected record capital gains tax last year.

She said: “A perfect storm of rate hikes, allowance cuts and endless speculation sparked an eye-watering spike in capital gains tax in 2024/25.

“CGT has gone from being a tax relatively few people had to worry about to something more mainstream, with the number of people paying CGT more than doubling in five years.

“Speculation ahead of the Budget in Autumn 2024 worried investors into realising gains ahead of the speech. Many of them will have sold assets they would otherwise have realised gradually – taking advantage of the annual allowance – because they were so concerned about potential changes.

“The Budget speech then brought miserable news for investors. For those making investment gains (excluding property), the rate rose from 10 per cent to 18 per cent for basic rate taxpayers and from 20 per cent to 24 per cent for higher rate taxpayers overnight.

“Former Chancellor Rachel Reeves also announced that the rate on business assets would start rising from April 2025 – with the hiking of the rate on sales qualifying for business asset disposal relief. It forced some business owners to fast-track a sale: during the year, eight per cent of CGT came from sales that qualified for this rate.

“Some of these capital gains tax tweaks have hit those on average incomes harder. Basic rate taxpayers saw a much bigger leap in their CGT rate than higher rate taxpayers.

“The shrinking of the annual allowance has also had a disproportionate effect on smaller investors, because the allowance used to cover a much larger percentage of their gains.

“The cuts in the annual allowance in April 2023 and April 2024 have also meant CGT pain has been spread further, hitting some smaller investors with bills for the first time.

“Up to 163,000 taxpayers were brought into the scope of CGT by the two cuts – from £12,300 to £6,000 and then £3,000. These taxpayers paid £108 million in CGT.

“This was the first year that gains from crypto were reported separately – revealing 17,600 people made gains of £1.38 billion. They were far more likely to be men than those reporting other kinds of gains – at 87 per cent compared to 56 per cent overall. They’re also much younger, because 54 per cent of taxpayers with crypto gains were aged between 25 and 44 – compared to 17 per cent of CGT as a whole.

“While crypto has generated some impressive tax bills, there remains a risk that some of these younger crypto fans aren’t aware that they have to pay capital gains tax on these assets when they sell up or when they swap them for other currencies. It means there could be nasty capital gains tax surprises lying in wait for unsuspecting investors when the taxman catches up with them.

“As we head towards the Budget, the IPPR has become the latest to call for an equalisation of the capital gains tax rate and the income tax rate. However, there are some serious issues with this approach.

“Such a massive hike would almost double the rate for higher and additional rate taxpayers overnight, which makes investing outside ISAs and pensions far less attractive. The government is keen to encourage more people in the UK to invest, so steps that make it less attractive seem counter-intuitive.

“There’s also a risk it drives poor investment choices, because people are driven by tax worries. It could encourage many to hoard assets until their income drops or even until death, which could lead them to hang onto investments that don’t suit their needs.”

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