Official data from HM Revenue & Customs reveals that Capital Gains Tax receipts for the 2024/25 tax year soared to £24.2 billion, an 89% surge compared to the previous year and the highest annual figure recorded since 1987. Released on August 28, this data underscores the significant impact of the Labour government's strategy to close the public finance gap through increased taxation.

A total of 584,000 individuals paid Capital Gains Tax during the tax year, marking a 45% rise year-on-year. Chancellor Rachel Reeves had previously implemented changes in the Autumn 2024 Budget, raising the Capital Gains Tax rates from a range of 10% to 28% up to a new band of 18% to 32%. Furthermore, the allowance had been reduced by the previous Conservative administration for the 2023/24 year and then halved again for 2024/25, bringing it down to just £3,000 annually.

HMRC attributes the record-breaking revenue to a combination of higher tax rates, the phased reduction of the tax-free allowance, and the increase in Business Asset Disposal Relief rates that took effect from April 2025. Capital Gains Tax applies to profits generated from the sale of various assets, including second homes, shares, and business interests. The total gains reported for the year reached £127 billion, an increase of 82%.

Notably, for the first time, HMRC has separately disclosed the Capital Gains Tax contributions from cryptocurrency investors. The data shows that 17,600 crypto holders collectively paid £1.38 billion in tax, with the bulk of taxpayers falling within the 35 to 44 age demographic. Among this group, 240 individuals reported gains exceeding £1 million each from their digital assets.

It has been reported that HMRC is intensifying its efforts against crypto tax evasion, having already recovered over £8 million through settlement agreements with digital asset dodgers. The Labour government is currently considering additional tax measures for its first Budget in October. However, some officials caution that escalating Capital Gains Tax rates could incentivize taxpayers to shift their assets to circumvent the levy, potentially resulting in lower overall revenue.

In a related development, Labour leader Andy Burnham stated this week that he would "never" advocate for taxing the wealthy out of the UK, instead encouraging entrepreneurs to build their wealth within the country and remain there long-term. The data also highlights a significant concentration of tax receipts, with 45% of all Capital Gains Tax revenue coming from a group of individuals with gains of £5 million or more, a cohort that represents less than 1% of all Capital Gains Tax payers.