{"id":6273,"date":"2025-03-20T09:51:09","date_gmt":"2025-03-20T09:51:09","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=6273"},"modified":"2025-03-20T09:51:10","modified_gmt":"2025-03-20T09:51:10","slug":"capital-gains-tax-clampdown-what-hmrcs-surge-in-investigations-means-for-you","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/capital-gains-tax-clampdown-what-hmrcs-surge-in-investigations-means-for-you\/","title":{"rendered":"Capital Gains Tax clampdown \u2013 What HMRC’s surge in investigations means for you"},"content":{"rendered":"

HM Revenue & Customs (HMRC) has intensified its efforts to track down unpaid Capital Gains Tax (CGT), with recent figures showing an increase in compliance activity.<\/span><\/p>\n

<\/p>\n

The number of completed CGT investigations more than trebled in the last tax year, rising from 4,564 cases in 2022\/23 to 14,223 cases in 2023\/24.<\/span>\u00a0<\/span><\/p>\n

For individuals and businesses, this sharp increase is a clear signal that HMRC is taking CGT compliance more seriously than ever, and the risk of being selected for investigation has grown.<\/span>\u00a0<\/span><\/p>\n

Why is HMRC focusing on Capital Gains Tax?<\/span><\/b>\u00a0<\/span><\/h3>\n

There are several factors behind HMRC’s clampdown:<\/span>\u00a0<\/span><\/p>\n

    \n
  • Government pressure to boost tax revenue <\/span><\/b>\u2013<\/span> HMRC has been tasked with improving tax compliance and raising revenue. Wealthy individuals, property owners, and investors are key target groups, as CGT represents a significant source of potential revenue.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
      \n
    • Reduction in CGT allowances <\/span><\/b>\u2013<\/span> From April 2024, the CGT annual exemption halved to \u00a33,000 for individuals and \u00a31,500 for trusts, down from \u00a36,000. With lower thresholds, more taxpayers will now face CGT liabilities.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
        \n
      • Expanded data access <\/span><\/b>\u2013<\/span> HMRC has increased its information-gathering powers, including access to data from crypto exchanges. This allows them to cross-check asset sales and identify undeclared gains more effectively.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n

        What do the latest figures show?<\/span><\/b>\u00a0<\/span><\/h3>\n

        While the number of completed CGT investigations skyrocketed, the amount of tax recovered increased only modestly, rising from \u00a3180.8 million in 2022\/23 to \u00a3202.4 million in 2023\/24.\u00a0<\/span>\u00a0<\/span><\/p>\n

        This suggests HMRC is casting a wider net, reviewing more cases, but still aiming to catch larger instances of non-compliance.<\/span>\u00a0<\/span><\/p>\n

        MPs have also criticised HMRC for underestimating tax evasion and lacking a clear strategy to address deliberate avoidance.\u00a0<\/span>\u00a0<\/span><\/p>\n

        The agency appears to be responding by stepping up its compliance activity, particularly around CGT.<\/span>\u00a0<\/span><\/p>\n

        Who is most at risk from a Capital Gains Tax clampdown?<\/span><\/b>\u00a0<\/span><\/h3>\n

        Certain groups are under increased scrutiny:<\/span>\u00a0<\/span><\/p>\n

          \n
        • Buy-to-let landlords and second home owners <\/span><\/b>\u2013<\/span> With property sales often generating sizeable gains, this group is firmly in HMRC\u2019s sights.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
            \n
          • Investors disposing of shares or business assets <\/span><\/b>\u2013<\/span> After the October Budget, higher and additional rate taxpayers now face 24 per cent CGT on these disposals.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
              \n
            • Crypto asset holders <\/span><\/b>\u2013<\/span> HMRC\u2019s access to crypto exchange data makes undeclared gains far more visible.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                \n
              • High-net-worth individuals <\/span><\/b>\u2013<\/span> Wealthier taxpayers, often holding diverse assets, could be at a greater risk of investigation due to the amount of tax HMRC could recover.\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ul>\n

                How can you stay compliant?<\/span><\/b>\u00a0<\/span><\/h3>\n

                With HMRC ramping up investigations and rates rising, it is important to make sure your CGT affairs are in order:<\/span>\u00a0<\/span><\/p>\n

                  \n
                • Keep accurate documentation<\/span><\/b> \u2013 Maintain clear records of asset purchases, associated costs, improvements, and sales.\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                    \n
                  • Use available reliefs and allowances<\/span><\/b> \u2013 While the CGT annual exemption has been reduced, reliefs such as Business Asset Disposal Relief are still available. However, note that the BADR rate is set to rise from 10 per cent to 14 per cent from April 2025, increasing the tax cost of qualifying disposals.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                      \n
                    • Report crypto disposals<\/span><\/b> \u2013 Even if profits are small, HMRC may easily identify undeclared crypto gains due to its expanded access to crypto exchange data.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n
                        \n
                      • Plan disposals carefully<\/span><\/b> \u2013 Consider the timing of asset sales in light of the recent rate increases and the upcoming rise in BADR rates, to minimise your tax liability.<\/span>\u00a0<\/span><\/li>\n<\/ul>\n

                        If you have concerns about past disposals or want to ensure you are compliant, our expert team is here to help. Speak to us today for trusted, proactive advice.<\/span><\/b>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

                        HM Revenue & Customs (HMRC) has intensified its efforts to track down unpaid Capital Gains Tax (CGT), with recent figures showing an increase in compliance activity.<\/p>\n","protected":false},"author":2,"featured_media":6276,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,125],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6273"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=6273"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6273\/revisions"}],"predecessor-version":[{"id":6274,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/6273\/revisions\/6274"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/6276"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=6273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=6273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=6273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}