Fiscal drag means 'record number' of people now pay CGT

More people paid CGT in 2021/22 than ever before

Jenna Brown
clock • 2 min read

Some 370,000 people declared capital gains tax (CGT) on their returns in 2021/22, a record number brought about by so-called fiscal drag, according to industry experts.

Latest government figures showed the number of people paying CGT was up 21% from the previous tax year, law firm Moore Kingston Smith said. Tax head Tim Stovold said it was "thanks to fiscal drag". Fiscal drag occurs when tax thresholds and allowances do not keep up with inflation or wage growth, resulting in more of a taxpayers' income being taxable, according to the government. Most tax thresholds have been frozen since the 2021 Spring Budget. Stovold explained fiscal drag had resulted in "bumper" CGT collection in 2021/22 "with tax due of £16.7bn, up 15.2% from the prior year. Howe...

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