Question to the HM Treasury:

To ask His Majesty's Government what estimate they have made of (1) the number of additional taxpayers who will have to complete Capital Gains tax returns as a result of the proposed reduction in threshold, (2) the amount of additional tax revenue that is likely to be raised, and (3) the extra cost of administration that will be required as a result of those changes.

A measure was announced at Autumn Statement 2022 to reduce the annual exempt amount (AEA) for capital gains tax (CGT) to £6,000 for tax year 2023 to 2024, with a further reduction to £3,000 for tax year 2024 to 2025 and subsequent tax years.

In 2024 to 2025, 260,000 individuals and trusts are estimated to be brought into the scope of CGT as a result of the measure.

However, some of those taxpayers brought into the scope of CGT would already have been expected to complete the capital gains tax supplementary pages within Self Assessment for the following reasons:

• To report a loss;
• To claim a relief;
• Where the total amount or value of the consideration for all ‘chargeable disposals’ of assets made by the person in the year exceeds four times the AEA before April 2023 (£50,000 from April 2023)

The amount of additional tax revenue that is expected to be raised as a result of the measure is set out in the table below:

These figures are set out in table 5.1 of Autumn Statement 2022 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Statement 2022 which is available on the gov.uk website.

A cost in the region of £100,000 will be incurred in delivering the relevant IT changes to support safe implementation of this measure. HMRC also expects to receive additional contact from customers who require support as a result of this change.