Record 584,000 people pay capital gains tax – 4 ways to cut your bill

HMRC recorded £24.5bn in capital gains tax (CGT) in 2024-25, with a record number of people paying the tax when they sold assets.

CGT liabilities were 89% higher than the year before, with the number of people having to pay increasing by 45% to 584,000.

The spike has been attributed to speculation ahead of Labour’s first Budget in October 2024, which saw the CGT rate for basic-rate taxpayers jump from 10% to 18%, and the rate for higher-rate taxpayers rise from 20% to 24%.

Here, Which? reveals what's behind the CGT surge, what could change in the upcoming Budget and four ways to cut your bill.

How much more CGT was paid?

CGT may be due when you make a profit from selling or transferring an asset and your total taxable gains exceed your annual £3,000 tax-free allowance.

Unless sheltered within a tax wrapper like an Isa or pension, taxable assets typically include things such as company shares and properties that are not your main residence – such as rental properties, holiday lets and second homes. Certain personal possessions, such as fine art and antiques, can also be liable for CGT if they're sold for more than £6,000.

Over the past decade, CGT receipts have increased significantly as asset prices have risen, while tax changes have also affected how much people pay. 

However, HMRC's most recent figures show there may be signs of the trend slowing. In August 2026, CGT revenue rose by £8m to £198m. However, overall collections between April and August dropped by £8m to £914m compared to the previous year. 

• Find out more: capital gains tax rates and allowances

HMRC clamping down on cryptocurrency 

For the first time, HMRC has published data on cryptocurrency profits alongside its regular CGT release. The 2024-25 figures reveal that 17,600 investors declared £1.38bn in crypto asset gains.

Notably, just 240 individuals reported over £1m each, making up £717m of the total gains.

At the same time, the tax office is escalating its crackdown on evasion through crypto-assets. 

In 2025-26, HMRC issued 81,172 warnings through letters, emails, and texts to crypto investors whose tax affairs it believed may need reviewing, this is up from 27,714 in 2023-24. 

On this rise, HMRC said: 'We’re committed to helping people pay the right amount of tax, and the vast majority do. We regularly send letters to educate, remind or prompt customers to review their tax affairs, including customers who use crypto assets.'

Enforcement will tighten further in 2027, when international crypto platforms will be required to share customer data with UK tax authorities – a measure HMRC estimates will raise an additional £315m by 2030.

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4 ways to cut your capital gains bill

Like with all taxes, there are ways you can reduce your liability:

1. Use your CGT allowance

Every tax year, you receive a £3,000 tax-free CGT allowance on a 'use it or lose it' basis. This applies to your total net profits across all assets, not per item. If your combined gains for the year stay within this £3,000 limit, you owe no tax and usually do not need to report the profit. 

Spouses and civil partners can also transfer investments between themselves tax-free, so can use both allowances and see up to £6,000 in annual gains. 

Transfers between spouses and civil partners are usually tax-free, which means you could work as a couple and receive tax-free capital gains of up to £6,000. For example, you could transfer investments to the partner who is in a lower tax bracket, doesn’t work or hasn’t fully used their CGT allowance.

• Find out more: capital gains tax on shares

2. Offset gains by making use of allowable losses

If you sell an investment at a loss, you can use that loss to reduce your tax bill. When you report a loss to HMRC, it is deducted from any gains you made in the same tax year, helping to lower your CGT liability. 

If your total gains remain above the £3,000 tax-free allowance, you can then apply losses carried forward from previous years. Unused carried-forward losses only need to reduce your gains down to the £3,000 threshold, allowing you to save the rest for future tax years. 

To claim losses, you must report them to HMRC within four years of the end of the tax year in which the investment was sold.

• Find out more: capital gains tax on property

3. Use your Isa allowance

Investing through an Isa protects your money from both income tax and CGT. You can pay in up to £20,000 each tax year across all your Isas combined – so cash and stocks and shares. 

If you already hold investments outside an Isa, a 'Bed and Isa' lets you move them into one by selling and rebuying them inside the tax-free wrapper. However, as you are selling the assets first, CGT will apply if your profits exceed your £3,000 annual allowance. 

Repeating this process each year helps shelter your entire portfolio over time. 

• Find out more: best stocks and share Isas 2026

4. Manage your taxable income

Because CGT rates are tied to your income tax bracket, lowering your taxable income can also reduce your CGT bill. One of the most effective ways to do this is by increasing your pension contributions. 

For example, earning £55,270 puts you £5,000 into the higher-rate tax band (which starts at £50,270), causing your gains to be taxed at 24%. Putting £5,000 into a pension shifts your income back into the basic-rate bracket, dropping your CGT rate to 18%. 

You can do this either through salary sacrifice at work or by paying into a personal pension like a SIPP.

• Find out more: dividend tax explained 

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Will CGT change in the Budget?

Rumours have resurfaced that the government may be considering equalising CGT rates with income tax rates at the upcoming Budget. This would see basic-rate taxpayers pay 20% on taxable gains, higher-rate taxpayers would pay 40%, while those who pay additional rate tax would face a 45% bill.

Researchers at the Centre for the Analysis of Taxation, a tie-up between the University of Warwick and the London School of Economics, say that doing so could raise an extra £26bn a year. 

However, HMRC analysis suggests that increasing the higher rate of CGT by 10 percentage points could actually lower receipts by £3.6bn in three years. By contrast, if the lower rate was increased by only one percentage point, it would raise £5m. 

Sarah Coles, head of personal finance at AJ Bell, noted that the decline in the most recent CGT numbers from HMRC suggests that the higher tax rates and lower CGT allowances are changing how people invest, making CGT a less reliable source of income for the government.

This is because unlike income tax, investors can control when – or even if –  they sell an asset and trigger a tax bill.

Coles said: 'It’s a useful demonstration of the fact that when it comes to CGT, tightening the screw doesn’t necessarily generate more tax, because people will change their behaviour – they’ll sell up ahead of changes, and then hoard assets for as long as possible afterwards to avoid a hefty tax bill. 

'We could still see a surge at the start of 2027, as CGT receipts always spike in the new year, but so far the tax take is lagging. It appears that the dramatic cuts in the annual exempt amount and the hikes in the rate for stocks and shares haven’t bolstered the Treasury coffers significantly.'

• Find out more: Autumn Budget 2026: when is it and what will it contain?