HMRC has published some interesting research into capital gains tax (CGT).
Here are three CGT questions for you to ponder:
The answer is just 256,000, according to the latest provisional figures from HMRC – 9,000 fewer than in the previous tax year. Viewed another way, that is less than 1% of all income taxpayers. However, over the 10 years since 2008/09 the number of CGT payers has nearly doubled.
Now you know that individual CGT payers numbered only about a quarter of a million, try the next question
The answer is £8,805m, which is over £3,400m more than was collected in inheritance tax (IHT) in 2018/19. IHT and CGT are both capital taxes, often levied on the same asset, albeit usually at different times. Yet CGT attracts much less criticism than IHT, which has been rated as the UK’s most-hated tax.
With the information on how many taxpayers and how much tax was collected, the third question might look easy…
The top 5,000 – about 2% of all CGT payers – contributed 54.4% (£4,789m) of all CGT paid. They all had gains of at least £2,000,000. Expand the band a little and 18,000 individuals, with gains of at least £500,000, accounted for just under three quarters of the CGT paid. The spread of gains and tax paid is shown in more detail in the pie chart below.
The answers to these three questions highlight two points which give pause for thought, one to the Chancellor and the other for investors:
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