Treasury receipts from capital gains tax have surged dramatically in early 2026, with HM Revenue & Customs collecting £19.7bn during January and February—a substantial 73% increase from the £11.4bn recorded in the corresponding period last year.

Wealth management professionals are scrutinizing the sharp uptick, attributing much of the growth to the erosion of tax-free thresholds that now expose a broader range of asset disposals to taxation.

These collections stem from self-assessment obligations for the 2024/25 tax year, predating the CGT rate adjustments introduced in the October 2024 Budget.

Jason Hollands, managing director at Evelyn Partners, a wealth management firm, observed: "CGT revenues continue their upward trajectory compared to the prior year, with the two-month aggregate of £19.7bn representing a 73% year-on-year increase.

"These January and February collections encompass self-assessment settlements for 2024/25, potentially capturing a wave of asset disposals executed from April 2024 onward as investors anticipated the CGT rate increases that materialized in the October Budget.

"Market expectations preceding that Budget suggested more aggressive rate hikes than ultimately implemented—some Labour MPs had advocated for alignment with income tax rates—which likely triggered substantial pre-emptive selling activity among asset holders.

"The annual exemption threshold, already reduced to a modest £3,000 by April 2024 under the previous administration, offers minimal shelter from CGT liability for investors liquidating positions. This compressed allowance has amplified revenue generation from any pre-Budget disposals. Whether this represents a temporary spike or signals sustained selling behavior under the elevated rate structure won't become clear until next year's data emerges.

"Capital gains taxation typically induces behavioral shifts—investors either accelerate disposals ahead of anticipated changes or postpone realization afterward, sometimes both. Many may now be adopting a wait-and-see posture, hoping a future government reduces the CGT burden. Others might be discouraged from establishing or funding new ventures in this higher-tax environment. These longer-term effects will take time to materialize in the data.

"Historical CGT revenue figures reveal limited Treasury benefit from the annual exemption reduction. Final data shows collections of £16.93bn in 2022/23, declining to £14.50bn in 2023/24 and further to £13.06bn in 2024/25, indicating investor reluctance to crystallize gains under diminished threshold protection."