Capital Gains Tax (CGT) in the UK has risen by over £2bn to a record £16.7bn for 2021-2022 with 394,000 taxpayers contributing to this with the total amount of taxpayers rising by 20%. This liability was claimed on £92.4 billion of gains

In 2020-2021 the CGT liability was £14.3bn, a 15% increase from 2021-22, and the record rise is thought to be due to an increase in the number of taxpayers, gains, and tax in residential property disposals. 49% of gains and 51% of tax liability were accounted for in London and the South East during the 2021-2022 period.

There are significant increases over the last 2 years as the 2019-2020 tax year shows CGT taxpayers disposed of 2 million assets totaling £198.4bn and gains of £80.7 bn calculating CGT at £10bn. From 2019 to 2022 there is a massive 60% surge in CGT.

Business Asset Disposal Relief (BADR) accounted for 7% of CGT from CGT disposals from taxpayers that qualify for BADR. 47,000 taxpayers claimed BADR on £12.6bn of gains resulting in a tax charge of £1.2bn over the 2021-2022 tax year according to HMRC. When the Finance Act 2020 was updated, Entrepreneurs’ Relief (ER) was renamed BADR which reduces the rate of capital gains tax (CGT) on disposals of certain business assets from 20% to 10%.

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.

If you have any CGT Issues or any other specialist tax issues and need to speak with a Chartered Tax Advisor then please contact Tax Advisory UK where we can assist you.

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