According to recent figures the UK’s population paid £6.9bn in capital gains tax (CGT) in 2014/15, an increase of 24.6% on the £5bn taken by HMRC in 2013/14.
This is the second time CGT yields have leapt up over the past two years and the obvious reason for the rise has to be the fact George Osbourne’s 2010 post-election Budget increased the capital gains tax rate from a flat rate of 18% to up to 28% depending on personal circumstances. However industry experts believe the reason this leap has been so dramatic is that house prices – particularly within London and the South East - are continuing to rise and the increasing volume of house sales going through suggests buy-to-let investors are taking full advantage ... and HMRC are taking full benefit as a result.
Many saw George Osborne’s final Autumn Statement as an overt attack on buy-to-let landlords as it included both a the changes to CGT and an additional hike in Stamp Duty. Given the significance of the figures involved it’s obvious those that are immediately going to be eligible to pay more in tax won’t be able to gloss over the additional tax liability or the bite it’ll take out of their potential profits.
These feelings are apparently supported by HMRC figures which show that of all of the CGT collected, 52% was generated within London and the South East and only 8% from Scotland, Wales and Northern Ireland.
A further increase is almost certain when the figures for 2015/16 are released as they will include the CGT paid by non residents which was introduced on 6 April 2015.