Capital gains tax receipts fall 10% as wealthy exit UK

The amount of capital gains tax paid to the Treasury over the past year dropped by more than £1 billion as fears grow of an exodus of wealth from Britain.

According to data from HM Revenue & Customs, capital gains tax (CGT) receipts fell to £13 billion in the 12 months to March 2025, down 10 per cent from £14.5 billion in the same period last year.

Analysts said that the fall in CGT income could reflect a trend of high-net-worth individuals leaving the UK after the non-dom regime was scrapped by Jeremy Hunt, the former Conservative chancellor, in the March 2024 budget. Others said that wealthy people may have paused sales of assets to avoid being hit by higher taxes.

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From the beginning of this month, most non-doms had their worldwide earnings subject to UK tax for the first time. A rise in the basic and higher rate of CGT to 18 per cent and 24 per cent respectively — announced by Rachel Reeves in the October budget — also took effect this month. The Office for Budget Responsibility thinks that the UK tax burden is on course for its highest level since the end of the Second World War.

Jonathan Riley, head of private client at Fladgate, a law firm, said: “It is interesting that [CGT] receipts have dropped after many wealthy business owners left because of the increased UK tax burden.

“In the last 18 months, business owners have been asked the question: would you like to sell your business (regardless of where it is located) and pay 24 per cent tax, or would you like to move (for example to Portugal, Italy or Spain), sell your business and pay no tax?

“Unsurprisingly many have answered that question by moving — and unfortunately it appears the outflow of wealthy business owners is not being met by an inflow of arrivals.”

Robert Salter, director at Blick Rothenberg, the accountancy firm, said: “The move to end the non-dom tax regime could reduce the number of wealthy non-doms in the UK and hence reduce future CGT receipts.”

According to Henley & Partners, which provides global relocation services, inquiries about leaving the UK in the first three months of this year were nearly three times higher compared with the same period in 2024.

Paul Finch, a director and head of new homes at Beauchamp Estates, said that sales of prime properties, which would feed into CGT revenues, had slowed, particularly in London. “There’s no smoke without fire,” he said, referring to the link between the drop in CGT income and the increase in taxes on wealthy people.

However, others downplayed the link between the non-dom abolition and the drop in CGT receipts and instead pointed to a fall in the value of financial assets and a slowdown in dealmaking after the sharp rise in interest rates since 2021.

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The increase in borrowing costs, to a peak of 5.25 per cent in the UK, “weighed heavily on the value of financial assets and contributed to a marked slowdown in mergers and acquisitions”, Jonathan Moyes, head of investment research at Wealth Club, said. Interest rates have been lowered to 4.5 per cent.

Moyes added: “Given that around 41 per cent of CGT is paid by individuals realising gains of £5 million or more — and that financial asset sales account for 79 per cent of total receipts — a fall in CGT revenues over the period is not surprising.”

Helen Clarke, a private client partner at Irwin Mitchell, a law firm that advises high-net-worth individuals, said: “Although it will be interesting to monitor the figures at the moment, I don’t see any real correlation with the changes to the non-dom rules but this will likely follow.”

The government was approached for comment.