Fiscal drag measures hit lowest earners the hardest

The new statistics provide the first detailed insight into the impact of cutting the CGT annual exemption. In the 2022 Autumn Statement it was announced that this annual exemption would be cut in the 2023/24 tax year from £12,300 to £6,000. A further cut would follow in the 2024/25 tax year when the annual exemption would be reduced to £3,000. 

This measure had the effect of dragging more taxpayers into paying CGT and we can now see the impact of that in the 2023/24 tax year. HMRC estimates that up to 83,000 individuals were impacted by this.