20 February 2026

Tax planning moves centre stage as CGT spikes and inheritance tax net widens

 

  • Capital Gains Tax (CGT) receipts for January 2026 were almost £17 billion
  • Inheritance tax (IHT) receipts for January 2026 were £7.1 billion which is £0.1 billion higher than the same period last year.

 

Commenting, Malvee Vaja, Chartered Financial Planner at Rathbones, says:

 

Capital Gains Tax

“January is typically a standout month for capital gains tax because of the self‑assessment deadline, but this year’s figures were particularly striking. The bumper haul suggests that recent cuts to allowances and higher rates are now biting. The combination of a sharply reduced annual exemption and higher rates has left investors with far less room to manoeuvre, while uncertainty in the lead up to last year’s Budget likely encouraged some to bring forward disposals.

“Capital gains tax is also one of the most behaviour‑sensitive parts of the system. People tend to bring decisions forward when change is expected, then delay selling once higher taxes are in place. That makes single‑month spikes hard to read in isolation. It will take time to see whether this surge represents a one‑off spike or a more durable shift in behaviour.

“For individuals, the key point is that standing still is no longer cost‑free. Strategically realising gains, making full use of ISAs and pensions, and thinking about timing rather than reacting at the point of sale can all help keep CGT manageable in a tougher environment.”

 

Inheritance Tax

“Inheritance tax receipts continue to edge higher. The main driver remains frozen thresholds, which are steadily pulling more families into the IHT net as property values and long‑term savings rise. For many households, it isn’t deliberate wealth‑building that creates an inheritance tax bill, but the simple fact that a family home now accounts for most of an estate’s value.

“Looking ahead, the planned inclusion of unused pension assets from April 2027 will widen the net further, turning what many see as a retirement planning tool into part of the inheritance tax equation.

“For many families, this underlines the importance of estate planning sooner rather than later. Reviewing wills, ownership structures and gifting intentions can make a meaningful difference, but it’s important not to act hastily or give away too much at the expense of future security. Inheritance tax is quietly shifting from a niche concern to a mainstream one, and taking calm, considered advice early can help families avoid difficult decisions later.”