The amount of capital gains tax collected increased by a quarter in a year, as more investors were charged for falling outside the allowance, according to figures from HM Revenue & Customs.
Latest figures from the tax office show capital gains liabilities increased by 25 per cent to £6.9bn in the 2014-15 tax year, from the previous year’s figure of £5.5bn.
According to HMRC, this increase was largely driven by growth in the equity and property markets, as capital gains tax is charged on the profits made when certain assets are sold or transferred.
The total number of capital gains taxpayers also increased over this period, up by 13 per cent to 242,000 from 214,000.
“These increases are likely to be related to increases in house prices, the number of house transactions and the prices of equities since the previous year,” HMRC stated, pointing out this led to an increase in the value of chargeable gains.
Back in April, the capital gains tax rates were cut by 8 per cent for shares within funds, and now stand at 20 per cent for the higher rate band and 10 per cent from the basic rate.
Danny Cox, chartered financial planner at Hargreaves Lansdown, said when compared to the rest of the tax family, capital gains tax is often seen as little cause for concern.
“But receipts have been climbing of late, and HMRC receives much more in capital gains than inheritance tax,” he said, pointing out capital gains tax has been cut recently for shares and funds, but not for second properties and buy to let.
“Investors ignore the impact of capital gains tax on their investments at their peril.
"Unfortunately it looks more like it will be buy to regret for those investing in property, with taxes rising, while shares and funds see tax improvements."
The Hargreaves planner said the increase in the Isa allowance to £20,000 from £15,240 back in April means investors have more scope to shelter their investments from tax.
“Taxes can distract investors from making good decisions and taking profits at the right time,” he said, pointing out that the recent cut in CGT helps share and fund investors make better decisions.
“As we saw from the last time the rate of CGT changed, low tax rates stimulate activity and tax generation.”
Lucy Brennan, partner at accountancy firm Saffery Champness, said the the rise in the amount of capital gains tax collected might help dispel claims that capital gains relief is open to abuse.
However, Ms Brennan said CGT numbers could "creep back down" in the next round of stats after the increase in the stamp duty rate on second homes impacted transaction volumes, combined with the reduction in the CGT rate.
"If property transactions continue to stall, we may see HMRC’s coffers take a double hit from both reduced stamp duty and capital gains tax receipts."
With the Autumn Statement on the horizon, Ms Brennan said the chancellor is likely to look to mitigate against any potential shortfall in the public coffers, and suggested capital gains tax relief could be a possible target for reform.