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Revealed: The London postcode which pays more in capital gains tax than Manchester, Newcastle and Liverpool COMBINED


  • More than half of capital gains tax paid in 2020 came from just 5,000 people 

Residents in Notting Hill paid more in capital gains in 2020 than the cities of Manchester, Liverpool and Newcastle combined, a new study has found.

A study where researchers had unprecedented access to the anonymised tax records has found that capital gains were ‘absurdly concentrated’ in a handful of postcodes and the most wealthy taxpayers.

It discovered that less than three per cent of adults had paid capital gains tax over 10 years, with most living in the southeast of England.

More than half (52.2 per cent) of the capital gains tax paid in 2020 came from just 5,000 people, who received an average of £6.8million per person in gains.

The report also found that three in every seven pounds of gains in the UK go to people earning more than £150,000. 

Capital gains tax is the levy paid on profits made when an asset, such as a property or business, is sold.

Residents in Notting Hill (pictured) paid more in capital gains in 2020 than the combined population of Manchester, Liverpool and Newcastle, analysis shows

Residents in Notting Hill (pictured) paid more in capital gains in 2020 than the combined population of Manchester, Liverpool and Newcastle, analysis shows

The rate varies on the type of asset being sold and the income of the person selling it. 

From April, basic-rate taxpayers will need to pay 10 per cent on gains above £3,000 – but if they come from selling a second home or rental property, the rate will be 18 per cent. 

Higher-rate taxpayers have to pay 28 per cent on gains made on residential property and 20 per cent on other assets.

Analysis by the University of Warwick and London School of Economics (LSE) found that just over 0.3 per cent of people who make under £50,000 had taxable gains in an average year, compared with almost 30 per cent of taxpayers with incomes over £5million receiving some gains.

Gains are strongly concentrated in southern England, the study found, with more gains in Kensington, west London, than in all of Wales.

In Kensington, people living in a small group of streets in Notting Hill, that are home to just 6,400 people, ‘had as much in capital gains in 2015-2019 as Liverpool, Manchester and Newcastle combined, highlighting the extent of hyper-local concentration within the capital’.

A panoramic shot of Deansgate in Manchester

A panoramic shot of Deansgate in Manchester

The Liverpool waterfront skyline

The Liverpool waterfront skyline

The Millennium Bridge in Newcastle-Gateshead

The Millennium Bridge in Newcastle-Gateshead

The report found that there were even huge disparities in London. Someone living in Kensington is more than 50 times as likely to receive gains as someone in Barking, east London. 

LSE Professor Andy Summers, one of the co-authors of the study said: ‘Although not common in the wider population, capital gains are a standard way to receive remuneration for the super-rich. This makes the tax break for capital gains particularly regressive.’

Andrew Lonsdale, another LSE researcher, said: ‘There are more capital gains in Kensington than the whole of Wales, and more in Hampstead and Kilburn than the North East of England. Continuing to tax these gains at a lower rate than earnings from work is the complete opposite of ‘levelling up’.’

And University of Warwick Professor Arun Advani said: ‘Capital gains are absurdly concentrated, with half the gains in the entire country going to as many people as could fit in the Albert Hall. Less than one in thirty people have any gains at all over the course of a decade.’





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