WALES: Record £447m capital gains tax bill as thousands more dragged into the net

A record £447m in capital gains tax flowed out of Wales last year, new HMRC figures show, as thousands more people were pulled into a tax long seen as a problem for the rich.

Some 18,000 people in Wales paid it in the 2024 to 2025 tax year, up from 14,000 the year before, a rise of almost a third.

Their combined bill of £447m was up 53% in a single year and the highest in the recent figures HMRC publishes, on £2.5bn of gains.

Capital gains tax is charged on the profit when you sell something that has risen in value: shares, a second home, a business, or cryptocurrency.

The main reason more people are paying is the shrinking tax-free allowance. Two years ago the first £12,300 of gains in a year was tax free. That was cut to £6,000, then to £3,000, where it stands now.

HMRC says the two cuts dragged up to 163,000 extra taxpayers into the net across the UK. Tellingly, its figures show those newcomers contributed less than 1% of the extra money raised.

Rates went up too, from 10% and 20% to 18% and 24% partway through the year, and HMRC says speculation about further rises before the autumn 2024 Budget pushed people into selling up early.

Half of those paying made less than £25,000

Roughly half of all capital gains taxpayers across the UK had gains under £25,000, HMRC’s figures show, and together they contributed less than 2% of the tax.

The big money sits elsewhere. Some 45% of the tax came from people with gains of £5m or more, a group making up less than 1% of payers, while London and the South East between them accounted for half of all gains. Wales’s £2.5bn is around 2% of the UK’s £127bn total.

Across the UK it was a record year on every measure, HMRC says: £127bn of gains, £24.2bn of tax, and an all-time high of 584,000 taxpayers, up 45% in a year.

240 crypto millionaires, and no way of knowing if any are Welsh

The figures also include HMRC’s first ever official statistics on cryptocurrency, after a dedicated crypto section was added to the self assessment return.

Some 17,600 people across the UK declared taxable crypto gains totalling £1.38bn, an average of £78,000 each, from selling assets such as Bitcoin, Ethereum and Dogecoin.

At the top, 240 people declared crypto gains of more than £1m each, sharing £717m between them. HMRC publishes no geographic breakdown of the crypto figures, so there is no way of knowing how many of the 240, if any, are in Wales.

The crypto crowd looks different from the typical capital gains taxpayer: 87% are male, and most are aged between 25 and 44, according to the figures.

They are about to become far more visible to the taxman. From 2027, HMRC starts receiving customer data directly from crypto exchanges under a new international reporting framework, and anyone with undeclared crypto tax can come forward now through its disclosure service.

“Taxes are due on cryptoasset gains just like any other gains,” said Treasury minister James Murray.

Anyone whose gains this tax year top the £3,000 allowance, on crypto or anything else, has to report them through self assessment by 31 January 2027.