Capital Gains Tax now raises more revenue than Inheritance Tax

Article

22 November, 2016

HMRC has recently published figures that show that in 2014/15 £6.9 billion of Capital Gains Tax (CGT) was paid by 220,000 individuals. This was a 22% increase on the previous year and compares to £3.8 billion Inheritance Tax paid during the 2014/15 tax year.

CGT collection levels are likely to further increase in subsequent years due to stock market levels and landlords who continue to pay CGT at the higher rates of 18/28% on residential property disposals.

Fortunately there are a number of simple things taxpayers can do to reduce their chances of being one of the 220,000 or so individuals lining the Government coffers. These include:-

  • Making additional pension contributions to reduce their level of taxable income. (Dependent on income levels and tax applicable rate).
  • Make full use of annual exemption - the annual exemption is given on a "use it or lose it" basis.
  • Make the most of reliefs including entrepreneur's relief.
  • Retain investments showing substantial gains.

With the average CGT bill now at £28,500 it is more important than ever to plan ahead and seek informed advice.

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