HMRC's latest figures show that Capital Gains Tax receipts reached £24.3 billion during the 2025/26 tax year. Whilst rising asset values have undoubtedly contributed to this increase, the growth in receipts is also a consequence of successive reductions to available reliefs and allowances.
As a result, many individuals who would historically have fallen outside the Capital Gains Tax regime are now finding themselves exposed to unexpected tax liabilities when disposing of shares, investment properties or business interests.
In our experience, the issue is often not that reliefs are unavailable. Rather, it is that advice is sought after a transaction has already been agreed, at which point many planning opportunities have disappeared.
One of the most common misconceptions surrounding Capital Gains Tax is that the tax position only becomes relevant once a sale is imminent.
In reality, the decisions made months or even years before a disposal can significantly influence the eventual tax outcome.
For example, where an individual intends to dispose of a sizeable investment portfolio, the timing of disposals may determine whether more than one Annual Exempt Amount can be utilised. Whilst the exemption has reduced considerably in recent years, it can still represent a worthwhile saving when used effectively.
Similarly, taxpayers frequently overlook historic capital losses which could be available to offset future gains. We regularly encounter situations where losses have arisen but have not been properly reported to HMRC, creating uncertainty over whether relief will be available when needed.
For married couples and civil partners, the way in which assets are held can have a material impact on the eventual Capital Gains Tax liability.
Because transfers between spouses and civil partners generally take place on a no gain/no loss basis, there can be opportunities to spread gains between individuals and make better use of available exemptions, losses and tax bands.
This is particularly relevant where one spouse is already a higher-rate taxpayer and the other has unused allowances or lower levels of taxable income.
Of course, tax should not be the sole driver of ownership decisions. Legal ownership, commercial objectives and wider estate planning considerations also need to be taken into account.
Whilst Capital Gains Tax planning often focuses on disposals, equal attention should be given to how investments are structured from the outset.
Investments held within tax-efficient wrappers such as ISAs can grow free from Capital Gains Tax. Over a number of years, consistently utilising available ISA allowances can significantly reduce future tax exposure and simplify reporting obligations.
For individuals with substantial investment portfolios, periodic reviews can help ensure that assets are being held in the most appropriate structure for their circumstances.
Where a disposal involves shares in a trading company, partnership interests or other business assets, the analysis becomes considerably more complex.
Questions frequently arise around the availability of Business Asset Disposal Relief, company reorganisations, share rights, family ownership structures and succession planning.
In these situations, the tax consequences can differ dramatically depending on how a transaction is structured. Seeking advice only after heads of terms have been agreed may mean valuable planning opportunities have already been lost.
The increasing amount of Capital Gains Tax being collected by HMRC serves as a reminder that tax should form part of the transaction planning process, rather than being viewed as a compliance exercise after the event.
Whether you are considering the sale of an investment property, a share portfolio or a business, understanding the tax implications before a transaction progresses can often lead to a significantly better outcome.
At ETC Tax, we advise business owners, investors and private individuals on Capital Gains Tax planning and transaction structuring. Where appropriate, we can help identify available reliefs, review ownership structures and assess the tax consequences of a proposed disposal before commitments are made. Get in touch here!
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What is Capital Gains Tax?
Capital Gains Tax is charged on the profit realised when an individual disposes of a chargeable asset. Common examples include investment properties, shares, business interests and certain personal assets.
The tax is generally charged on the gain arising, rather than the sale proceeds themselves.
Is my main residence subject to Capital Gains Tax?
A disposal of an individual's only or main residence will often qualify for Private Residence Relief, which can eliminate or significantly reduce any CGT liability.
However, relief may be restricted in certain circumstances, including periods of non-occupation or where part of the property has been used exclusively for business purposes.
Are gifts subject to Capital Gains Tax?
In many cases, gifts are treated as disposals for CGT purposes and may give rise to a taxable gain, even where no cash consideration is received.
The availability of reliefs will depend on the nature of the asset being transferred and the circumstances of the transaction.
How are Capital Gains Tax rates determined?
The applicable CGT rate depends on a range of factors, including the nature of the asset disposed of and the individual's wider tax position.
Different rates may apply to residential property, carried interest and other chargeable assets.
When should I seek Capital Gains Tax advice?
Ideally, advice should be sought before a transaction is agreed or becomes legally binding. Early engagement allows potential reliefs, exemptions and planning opportunities to be identified and considered while options remain available.
