Capital gains tax receipts surged to record levels in the 2024-25 tax year, with both taxable gains and the number of people paying CGT rising sharply.

The latest annual figures from HM Revenue & Customs show taxpayers reported £127.3bn of capital gains during the year.

That represented an 82% increase compared with 2023-24 and marked the highest amount on record.

The resulting CGT liability reached £24.2bn, an increase of 89% year-on-year.

HMRC also recorded a substantial rise in the number of people paying the tax.

A total of 584,000 taxpayers incurred CGT liabilities during 2024-25, up 45% from the previous year and another record high.

The figures will be closely watched across the property sector, where CGT can apply when landlords and other property investors dispose of residential assets that do not qualify for private residence relief.

The sharp increase follows changes to the CGT annual exempt amount in recent years.

The allowance fell from £12,300 in 2022-23 to £6,000 in 2023-24. It then dropped again to £3,000 from April 2024.

The reduction means more investors can incur a CGT liability when selling assets, including investment properties.

The latest HMRC figures cover CGT across all applicable asset classes and are not limited to property disposals.

David Little, partner in financial planning at wealth management firm Evelyn Partners, said: “This is a remarkable surge in CGT liabilities for the 2024/25 financial year, which is even greater than that suggested by recent receipts data. Never have UK investors realised more gains or paid more tax in a financial year.

“As HMRC itself notes, it seems likely we are seeing the reaction of investors to firm expectations that there would be increases in CGT rates at the 2024 Autumn Budget, as well as the announcement that Business Asset Disposal Relief (BADR) rate would increase from April 2025.

“We certainly saw some clients crystallising gains ahead of that first Rachel Reeves Budget, when CGT rose with immediate effect on 30 October, from 10% to 18% for basic rate taxpayers and 20% to 24% for those on the higher rates of tax.

“Crucially, disposals at that time were made against a background of consecutive yearly reductions to the Annual Exempt Amount – the tax-free allowance that taxpayers can realise in gains before paying CGT – from £12,300 to £3,000, which left investors with far less protection against taxable gains.

“HMRC itself notes that as many as 163,000 taxpayers were brought into the scope of CGT by the consecutive reductions in the AEA implemented on 6 April 2023 and 6 April 2024. Altogether in 2024/25 tax year, those cuts to the annual CGT allowance resulted in an additional £4.8 billion of gains being charged to CGT.

“For UK investors, all this points towards the importance of using tax-protected wrappers where possible for their investments, including ISAs and pensions. It also highlights the wisdom of using up, where appropriate, the £3,000 annual exemption each year to realise gains tax-efficiently over time. Finally, married couples have the advantage of being able to use interspousal transfer and two sets of allowances (for both ISAs and the AEA), with the option of a lower-rate taxpayer holding chargeable gains.

“Whether disposals made after that October 2024 Budget, at the higher rates, continued to boost CGT liabilities and receipts remains less clear, as it seems likely that most investors had already acted in advance. We’ll have to wait until the first quarter of next year before we really start seeing any impact from the CGT rate hikes, and it will be interesting to see if investors have been put off disposing of assets and realising gains.”