Capital Gains Tax take up 42% to £14.3 billion in 2020-21 from £10.1 billion in 2019-20.

323,000 taxpayers footed the CGT bill in 2020-21, an increase of 53,000 from the previous year.

CGT on residential property disposals accounted for £1.7bn in 2021-22, and was a bill picked up by 129,000 taxpayers. This is up from £1.14 billion across 85,000 taxpayers in 2020-21 tax year.

The increase reflects changes to Business Asset Disposal Relief and concerns about CGT rises towards the end of the tax year.
Average bill in 2021-20 was £44,316 per CGT taxpayer, up from £37,289 in 2019-20.

Alex Davies, Chief Executive of Wealth Club, reacts to today’s HMRC capital gains tax figures and recommends ways to mitigate CGT liability:

“Capital gains tax is charged on the profit from the sale of a business, shares and investments, second properties and family heirlooms. It’s a great cash cow for HMRC who raked in over £14bn from the tax in 2020-21, that’s 42% more than in the previous year. This is a steep increase on the amount received in the previous year, which is put down to media speculation about changes to CGT rules, policy changes affecting eligibility for certain reliefs, and also to a lesser extent, an increase in the number of buy-to-let disposals as a result of the change in tax rules.

. Each year there is a capital gains annual allowance of £12,300 per person and everyone gets a new CGT allowance each new tax year. After that, CGT is due. If you don’t use your allowance it cannot be carried over to the following year. The good news is there are still a number of steps individuals can take to ensure they keep CGT bills to a minimum.”

You can invest up to £20,000 in an ISA each year, and up to £40,000 for your pension depending on circumstances. By investing in an ISA or Pension you can avoid CGT.
If you’re married, you could consider transferring your assets such as buy to let property into your partner’s name, or split it with them, so that when sold, you can both use your annual allowance of £12,300, reducing the amount of tax payable.
You can also split the sale of assets such as shares in a portfolio over several years so that you don’t go over the annual allowance in any one year.
Gains and losses can be offset against each other to reduce your CGT bill, unused losses from previous years can be brought forward, provided they are reported to HMRC within four years from the end of the tax year in which they were disposed of.
If you want to keep your money invested but still utilise your CGT allowance for the year, you can sell the investment, and buy something similar but not the same for tax purposes. eg. sell your FTSE all share tracker and buy an alternative one from a different provider.
Or, look beyond pensions and ISAs to save up to 50% income and capital gains tax

Pensions and ISAs are great, but the allowances can be restrictive for some. To mitigate this, if you’re prepared to take extra risk, you could look to the government’s venture capital schemes. Each offers a different mix of tax benefits. Which you go for will largely depend on circumstances and how much risk you’re prepared to take. As a rule of thumb, the greater the tax benefits, the higher the risk.

Venture Capital Trusts (VCTs) offer up to 30% income tax relief. Returns are paid through regular tax-free dividends, which is a nice bonus, and any gains are CGT free. The allowance is a very respectable £200,000 a year.

Enterprise Investment Scheme (EIS) investments also offer up to 30% income tax relief. There are no tax-free dividends, but one bonus here is that you can also defer capital gains. For as long as you stay invested in any EIS, you can forget about the CGT bill. It will only become payable once you come out of the EIS, unless you re-invest the money into another. The EIS allowance is a whopping £1 million a year or £2 million if you invest at least £1 million into “knowledge intensive” companies.

The Seed Enterprise Investment Scheme (SEIS) is the most generous when it comes to tax savings. When you invest you can get up to 50% income tax relief and 50% capital gains tax reinvestment relief. The allowance is more modest but still sizeable at £100,000. Nonetheless it means a £100,000 investment could save you up to £50,000 income tax plus £14,000 capital gains tax (assuming you have paid 28% CGT on the sale of a property).