From 6 April 2023, the current allowance of £12,300, which is the amount above which people begin to pay tax when they sell an asset for a profit, will be cut by more than half to £6,000, its lowest level since 1995/96. In April 2024 it falls even further to £3,000, meaning more people making capital disposals will be brought into the net of paying CGT.

The CIOT says the lowered allowances will see thousands more people required to fill out a Self-Assessment tax return, and possibly pay more tax as a result, but many of these may not be aware they need to do so until it is too late. It has called on the Government to launch a publicity campaign highlighting the changes, aimed at those who may be affected.

These include people with small holdings of shares, non-UK residents selling investments in UK real estate and those selling a second home, including foreign holiday homes, who may not have access to advisers or investment managers to inform them of the changes and their new responsibilities.

John Barnett, chair of CIOT’s technical policy & oversight committee, said: “A lower annual exemption means some people making smaller gains will now need to pay tax when they previously wouldn’t have.

“We are concerned that many of those now brought into the net will not be aware of this and could be left with tax bills and penalties as a result.

“Coupled with a similar lowering of the income tax dividend allowance, there may be a big increase in the number of people on a smaller income scale who will now be required to fill in a tax return and pay tax. Many of these are less likely to be represented and uncertain of their obligations, or the consequences of getting it wrong.

“We urge the government to publicise these changes so that as many as possible of those who will be affected by the lowered allowance know their responsibilities and don’t end up with a surprise tax bill in the future.”