Treasury receipts from capital gains tax have surged dramatically in early 2026. HM Revenue & Customs collected £19.7bn during January and February, representing a substantial 73% increase compared to the £11.4bn gathered in the corresponding period last year.

Wealth management professionals are scrutinizing the data, attributing the sharp uptick to the continued freeze on tax-free allowances that has expanded the taxable base considerably.

These collections stem from self-assessment returns covering the 2024/25 fiscal year, predating the rate adjustments introduced through the October 2024 Budget.

Jason Hollands, managing director at Evelyn Partners, a wealth management firm, offered his analysis: "CGT revenues continue their upward trajectory versus the prior year. The two-month aggregate of £19.7bn marks a striking 73% year-over-year increase.

"These early-year receipts capture self-assessment settlements for 2024/25, potentially reflecting strategic asset disposals by investors from April 2024 onward. Many anticipated rate increases that ultimately materialized in the October Budget.

"Market expectations ahead of that Budget suggested more aggressive rate hikes than actually occurred. Some Labour MPs had advocated for alignment with income tax rates, which likely prompted considerable pre-emptive selling activity.

"The annual exemption had already been reduced to a minimal £3,000 by April 2024 under the previous administration. This severely curtailed tax-free disposal capacity for investors, amplifying revenues from any pre-Budget transactions. Whether this represents a temporary spike or sustained elevated collections under the new rate structure won't be clear until next year's data emerges.

"Capital gains taxation typically triggers behavioral responses from investors. They either accelerate disposals ahead of anticipated changes or postpone realization afterward—sometimes both. Some may now be holding positions in anticipation of future rate reductions under a different government. Others might reconsider business formation or investment commitments given the heightened tax environment. These longer-term effects will take time to materialize in the data.

"Historical revenue figures reveal limited Treasury benefit from the exemption reduction itself. Final data shows CGT generated £16.93bn in 2022/23, declining to £14.50bn in 2023/24, and further to £13.06bn in 2024/25. This pattern indicates investor reluctance to crystallize gains under the diminished allowance regime."