New figures published by HMRC show Capital Gains Tax (CGT) liabilities on the sale of residential property in the 2022 to 2023 tax year increased 7% versus the prior year.
In total, the disposal of residential property in the 2022 to 2023 tax year led to a CGT liability of more than £1.9bn for 149,000 taxpayers, up from 141,000 in the prior year when liabilities reached £1.8bn.
Capital Gains Tax is a tax paid on the gain you make when you sell a property that’s not your main home. You only have to pay CGT on your total gains above an annual tax-free allowance. This annual allowance has dropped significantly in recent years – from £12,300 in 22/23 to £6000 in 23/24 and falling again to £3,000 in the current year.
Beyond the figures for just property, there was an overall 15% decline in Capital Gains Tax (CGT) liabilities in the 2022 to 2023 tax year.
Dawn Register, head of tax dispute resolution at BDO, said: “While figures show an overall decline in CGT in the 22/23 tax year, CGT liabilities rose for those selling second properties.
“This could be a sign that landlords and holiday home owners are selling up off the back of earlier tax changes and the impact of fiscal drag.
“Whether or not a rise in CGT is on the cards for this October’s Budget, the increased speculation may well convince some to bring forward their plans to dispose of property or other assets.
“And in fact, this could be very useful for a government keen to maximise tax revenues in the current year, with CGT on the sale of a second property due within 60 days of completion.”
