The update on statistics for capital gains tax (CGT) released on 3 August 2023 notes that record amounts of capital gains were reported in 2021/22 and record amounts of CGT were collected. The statistics are based on the self-assessment tax returns that report a CGT liability.

The total CGT liability for the year was GBP 16.7 billion, an increase of 15% on the previous year, and this was paid by 394,000 taxpayers, which is also higher than before but is only 1% of the number of people who pay income tax. The total capital gains on which CGT was charged for the year amounted to GBP 92.4 billion of gains.

The statistics indicate that most of the CGT was paid by a small number of taxpayers, representing less than 1% of CGT taxpayers in the year. In 2021/22, 45% of the CGT was collected from taxpayers with gains of GBP 5 million or more. Around one-third of CGT taxpayers have gains below GBP 25,000 and these taxpayers contribute only around 1% of total CGT.

The statistics for 2021/22 show that taxpayers from London and the Southeast of England accounted for 49% of the capital gains in the year and paid 51% of the total tax liability.

Business Asset Disposal Relief

Business Asset Disposal Relief (BADR), previously known as Entrepreneurs’ Relief, provides for the CGT rate to be reduced to an effective rate of 10% on qualifying disposals of business assets up to a specified lifetime limit. An eligible claimant must be an individual carrying on a business as a sole trader or partner, or a trustee disposing of assets used in a business; or the owner of at least 5% of shares in a trading company (or holding company of a trading group) of which the individual is an employee or officer. The business should be engaged in a trade, profession or vocation.

In 2021/22 around 7% of the total capital gains tax came from disposals that qualified for the BADR. The BADR was claimed by around 47,000 taxpayers in 2021/22 on GBP 12.6 billion of gains, with a total tax charge of GBP 1.2 billion.

UK property reporting service

Since April 2020 a UK resident disposing of a UK residential property should calculate, report and pay the tax within 30 days of completion. The report is made online through the UK property reporting service.

In 2022/23 (the year to 5 April 2023) the UK property reporting service was used by 139,000 taxpayers, who reported 151,000 disposals of residential property with a total CGT liability of more than GBP 1.7 billion.