HM Revenue & Customs collected record amounts of capital gains tax in 2019-20, a trend which is predicted to continue.
During 2019-20 HMRC collected £9.9bn of CGT - an increase of 3 per cent - but the number of taxpayers fell by 6 per cent to 265,000.
Most CGT comes from a small number of taxpayers who make large gains. In 2019-20, 41 per cent of CGT came from those who made gains of £5m or more - a group which represents less than 1 per cent of CGT taxpayers.
But Shaun Moore, tax and financial planning expert at Quilter, said recent tax reforms suggested the amount of CGT collected by HMRC was likely to continue increasing.
He said: "At the most recent budget the chancellor froze the annual CGT allowance at £12,300 until 2026 at the earliest and there is no guarantee the tax rate will stay at its current level as the government scrambles to find revenues where it can.
"Just under a third of revenues also came from business assets qualifying for Business Asset Disposal Relief (formerly Entrepreneurs Relief). This was cut recently to £1m from £10m in the Budget so this will also contribute to future increases.
"Clearly with asset prices rising and frozen or decreasing allowances, more people will ultimately be brought into scope to pay CGT, and as such it is a good idea to plan your disposals thoroughly and ensure they are done in the most tax-effective way."
Jason Hollands, managing director of Bestinvest, said: "Even without rumoured hikes to CGT rates or a reduction in the annual capital gains tax allowances, increasing numbers of people are likely to be impacted by CGT over the coming years as a result of a decision in the chancellor’s last Budget to freeze the annual £12,300 capital gains allowance until April 2026.
"This freeze is particularly painful in a period of higher inflation and buoyant share prices and valuations on second properties are likely to draw many more people into the web of CGT."
Over the past decade the CGT allowance has increased from £10,600 to £12,300 but in this year's Budget, chancellor Rishi Sunak announced it would be frozen for five years.
Last year the Office of Tax Simplification recommended that the government should align CGT with income tax and reduce the annual allowance because its current structure "distorts behaviour" and creates "odd incentives".
damian.fantato@ft.com
