HMRC Recovers £477m in CGT: What It Means for Your Tax Return

Tax Queen

Tax Expert @ Pie

5 min read

What You Need to Know

If you sold shares, a second property or business assets at a profit, HMRC is now looking at capital gains much more closely. This news doesn't change the tax rules, but your return is now more likely to be checked.

What you need to do is simple. If you sold an asset in the 2025-26 tax year (6 April 2025 to 5 April 2026), make sure any taxable gain goes on your Self Assessment return, which is due online by 31 January 2027. Keep the paperwork that backs up your figures.

Why HMRC Is Investigating More Taxpayers

HMRC recovered £477 million in extra capital gains tax in the 2025-26 tax year. It completed around 9,400 investigations into individuals that year, up from 3,200 in 2021-22. [Editor Note: Unverified figure - check against HMRC guidance]

Part of the rise comes from extra staff, including more compliance officers and people who used to work on pandemic-era support schemes. HMRC is also using technology, including artificial intelligence, to analyse taxpayer records and pick out cases for a closer look.

Tax advisers say they're seeing more requests for information and tougher negotiations over settlements. A settlement is the agreement you reach with HMRC about how much extra tax you owe. To find out what tends to start a check, read our guide to what triggers an HMRC investigation, which covers the common red flags.

Does This Only Affect the Wealthy?

No. Advisers report more cases involving high-net-worth individuals, but HMRC's investigations check whether any taxpayer has reported their income, gains and other taxable transactions correctly. A sole trader who sells shares, or a landlord who sells a rental home, has to report it correctly too.

When a Sale Can Trigger Capital Gains Tax

Capital gains tax (CGT) is a tax on the profit you make when you sell or dispose of certain assets for more than they cost you. Only the gain is taxed, not the full sale price.

For self-employed people and landlords, the most common examples are investments such as shares, second properties such as buy-to-lets, and business assets. Exemptions and reliefs may reduce the tax or remove it altogether.

Your main home is usually covered by a relief, so selling the house you live in rarely leaves you with a CGT bill. Our article on how Private Residence Relief can save you money on capital gains tax explains how this works when you sell your home.

How Much You Might Pay

Your CGT depends on the type of asset, your circumstances, the annual tax-free allowance (known as the annual exempt amount) and the rates that apply to you. Your total income for the year can affect the rate, so a strong year for your business can change what you pay on a gain.

Rate changes and cuts to the annual allowance in recent years have affected when people choose to sell. Before you work out a bill, check the current rates and allowance on GOV.UK for the tax year in which you made the sale.

Possible Changes Ahead of the Budget

CGT is being debated ahead of the Government's next Budget. Some proposals would bring CGT rates closer to income tax rates. Supporters say this would raise more money, while critics warn it could discourage investment and business activity.

The Institute for Public Policy Research has previously backed CGT changes as part of a wider set of measures to raise public revenue. Nothing is confirmed, though, and any change depends on formal Government announcements.

If you're thinking about selling an asset, don't rush into it because of speculation. Wait for confirmed rules, and think about speaking to a qualified tax adviser if the sale is a large one.

How to Report Your Gains to HMRC

If you already file Self Assessment, you usually report taxable gains on the capital gains summary pages (SA108) of your return. Any tax due is normally paid by 31 January after the end of the tax year.

Sales of UK residential property, such as a buy-to-let, generally have a separate and faster process. The report and payment are usually due within 60 days of completion. [Editor Note: Unverified figure - check against HMRC guidance]

If you're not sure whether a sale creates a CGT bill, check HMRC's official guidance or speak to a qualified tax professional before you file. Getting the answer right first time is much easier than fixing it during an investigation.

Records That Protect You in a Check

With HMRC asking for more information, good records are your best protection. For every asset you sell, keep the purchase and sale prices, the dates you bought and sold it, any eligible transaction costs and details of any reliefs you're claiming.

Landlords should keep these records with the rest of their rental paperwork, because you may need the purchase details many years later when you sell. Our guide to HMRC property income record keeping for Self Assessment explains what to track and how long to keep it.

Store documents somewhere you can find them quickly, such as scanned copies kept with your digital accounts. If HMRC sends a request for information, you can answer promptly and with confidence.

Getting Your Return Ready Before 31 January

With more checks under way and possible CGT changes ahead, the safest place to be is with an accurate return backed by records you can find easily. Sorting out your income, expenses and any asset sales now gives you time to spot gaps before the deadline.

If you're a sole trader, landlord or freelancer, self-assessment software like Pie Tax pulls your income into one place and sorts your allowable expenses. That way, the rest of your return is in good order while you focus on getting any gains right.

If you sold an asset in 2025-26 and want your return ready well before the deadline, a good first step is to get your income records organised. Try Pie Tax for free.