Capital Gains Tax (CGT) receipts could exceed the £10bn mark in 2021, according to analysis of HMRC data by Canada Life.
The tax specialist suggested that a rise in receipts has been caused by more gains being realised by investors, with the future of CGT currently uncertain.
New figures published byHMRC indicated that receipts in 2019/20 have continued to gradually increase following the economic slowdown that was recorded in 2009/10.
For 2019/20, HMRC revealed that CGT receipts – as well as Income Tax, National Insurance Contributions and the Apprenticeship Levy – as a proportion of the OBR’s forecast GDP level were 15.7%, compared to 16.4% in 2008/09.
HMRC attributed the fall to the reduction in economic activity and some structural changes such as above-inflation increases in the personal allowance.
“The latest data from HMRC shows CGT receipts could exceed £10bn this tax year, which would mark a record year of receipts exceeding any of the 12 previous tax years,” commented Canada Life tax and wealth specialist, Neil Jones.
“The increase in receipts is caused by more gains being realised which would reflect investors’ uncertainty around the future of CGT. Many were expecting the Budget speech to include a rise in rates from 6 April 2021 but this did not happen.
“Will people continue to realise gains ahead of any potential changes further down the line? This may depend on the consultations expected next week as part of ‘Tax Day’ and could provide the government with a windfall ahead of any changes.”
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