Wealth taxes
Summary
You can’t tax what isn’t there!
Wealthy people are mobile.
Wealth is mobile.
Wealth can be hidden.
The only form of wealth that isn’t mobile and can’t be hidden is land.
If you can’t, and don’t, enforce a law, why create it?
We already tax wealth!
If you want to increase the tax on obscene City bonuses and CEO salaries, simply increase income tax.
If you want to to increase tax on the sale of assets, including shares, simply increase Capital Gains Tax (CGT).
If you want to slow down the City gambling that crashed the world economy in 2007/2008, simply introduce a financial transaction tax.
If you want to tax the silver spoons that allow people to become rich by the effort of being born, simply scrap Inheritance Tax and introduce a lifetime gift allowance.
If you want to raise billions by making existing taxes fairer, so that those with most contribute most, simply implement the suggestions in Richard Murphy’s Taxing Wealth Report.
Direct wealth taxes:
These are sometimes defined as 1% on >£10 million and 2% on > £1 billion.
They are based on a person’s “net asset value” - the total value of everything they own minus their liabilities - and sometimes minus depreciation, and taking into account inflation, and taking into account …. (It rapidly become complicated - see below under “What is wealth?”)
Direct wealth taxes:
apply to people, not a thing,
are complicated, they increase the size of the tax code (lawyers love them),
are easy to avoid. E.g. trusts, leaving, complex company holdings, tax havens etc.
ownership of major assets: superyachts, private jets, even land; is easy to hide,
are very difficult and expensive to enforce,
taxes something which is abstract, nebulous, hard to define: “wealth”,
are discriminatory, they are seen as “punishing those with enterprise”,
are self reporting, those with wealth have to list their own assets,
encourage avoidance and even criminality,
those with the best and most devious lawyers avoid the most tax,
and, of course, the wealthy may leave and take their wealth with them (*),
Indirect wealth tax:
Land Value Tax taxes a single thing, the value of land, not a person.
Land Value Tax:
is simple - easy for everyone to understand (lawyers hate it),
reduces the size of the tax code by replacing other taxes,
taxes the the freeholder recorded by the Land Registry,
taxes the value of land, not “net assets”,
is fair, those with the most, contribute the most,
is easy and cheap to enforce - freeholders pay the LVT, no matter where they are,
you can leave and take your other wealth - but you can’t take land,
taxes something very specific - the land we, as a society, own and share,
taxes something we can see, which can’t be moved (*) or hidden,
is impossible to avoid - the land is here and we know the freeholder,
enables us all to benefit from the thing that makes up 60% of our national assets.
* this is a free country - though no longer as free as it used to be. The wealthy are free to leave, repatriate any funds held overseas, settle up with HMRC, surrender their passports, give up their citizenship and go to whichever country will have them. They can also live outside the UK without giving up citizenship. Either way, they can’t take their land and we will still benefit from the Land Value Tax due on it.
Why do direct wealth taxes fail?
Almost all countries who adopted wealth taxes have dropped them.
Those who have kept them (after years and years of tweaking) have found that:
they bring in a tiny fraction of the amount originally anticipated,
they are very expensive in enforce. The chances of being caught are minimal,
they result in massive evasion, avoidance and flight.
The examples quoted are usually Norway, Switzerland and Spain. It is worth following these links for Norway and Switzerland.
Why did the rich in Norway leave for Switzerland? Simple. Despite minimal wealth taxes (which vary from Canton to Canton) Switzerland has much lower overall taxes than Norway.
Spanish wealth taxes are complicated and vary between regions - the rate in Madrid is zero!
Simple is good, complex is bad!
Lawyers hate simple laws - because they contain no loopholes.
Land Value Tax is simple - and impossible to avoid.
So, why suggest wealth taxes that are complicated, riddled with loopholes, easy to avoid and impossible to enforce?
Human nature means people will try to pay as little tax as possible - direct wealth taxes encourage the wealthy to employ expensive tax avoidance lawyers.
Is the intention to create jobs for lawyers?
Will the wealthy always tell the truth? Who checks?
Who decides who has to fill in a “wealth report?” Is it all of us or just the 12 million of us who have to complete a self assessment form every year?
Land Value Tax requires no form filling - it is automatic - the freeholder gets a bill!
Land Value Tax requires no enforcement. Failure to pay results in an automatic restriction placed on the land title so it cannot be sold or transferred until payment, with interest, is made.
Why make things complicated when the simple is so easy?
The wealth tax proposal
The Green Party has proposed 1% on all assets over £10 million and 2% on all assets over £1 billion.
At first glance, without thinking about it carefully, this seems a pretty good idea – and it is certainly popular (unless you are wealthy!)
In 2013 the Green Party under Caroline Lucas commissioned Andy Wightman to write a report “A land value tax for England”. The report was excellent and turned many people (including the author of this article) on to LVT.
For a while the Green Party promoted LVT as an official policy but then suddenly dropped it.
Why?
Simple. LVT is fair because it applies equally to all freeholders, without exception, and that includes domestic households - LVT taxes the value of land under people’s homes.
Despite
the fact that over 80% of people would pay less under LVT,
that a small minority would pay up to 10% more,
that an incredibly small number (mainly in the South East) would pay over 10% more,
the Green Party ran for the hills.
The concerns raised within the Green Party are simple to address:
phasing in over 10 years (LVT goes up, other taxes go down) means people and the market have time to adjust. There will be no sudden changes.
the tiny minority who face higher bills can opt to defer paying the balance until property is sold or transferred. No one will lose their home because of LVT.
The system of national and local supplements (the opposite of tax breaks which create loopholes!) allows places like London to deal with local concerns.
Please also see the “The political problem” section near the beginning of the “Objections” page.
Creating a new industry
We already have tens of thousands of “tax advisors” in the UK (HMRC estimates 85,000 plus) - mainly accountants and lawyers - with about 35% of them not members of any recognised professional organisation.
A direct wealth tax, based on a percentage of net assets, will be a a job creation scheme for tax avoidance advisors and will lead to endless books and seminars on “How to avoid a wealth tax”.
HMRC would require an army of forensic accountants to dig behind the complex schemes that will be created to hide wealth or to hide the ownership of wealth.
The only way to avoid this time consuming and expensive chaos is to use an indirect tax on wealth, one that is simple to understand, fair and impossible to avoid. Land Value Tax is such a tax.
Mark Trusley is a member of the International Wealth Protection Foundation (IWPF) and has homes in Switzerland, France, Italy and the USA. His office in London’s Mayfair attracts clients from those who have passed wealth down through generations to those who have created new wealth through personal enterprise
“How to avoid a wealth tax” outlines the ten most successful schemes Mark has used to ensure that wealth remains within families without paying unnecessary tax.
What is wealth?
Surely this is easy, after all The Sunday Times publishes a rich list every year!
The list contains estimates from a range of public information and the editors state:
"We measure identifiable wealth, whether land, property, racehorses, art or significant shares in publicly quoted companies. We exclude bank accounts—to which we have no access... We try to give due consideration to liabilities."
There is a huge difference between the sensationalist guestimates published in The Sunday Times and reality. No doubt billionaires gain bragging rights by being high in the list but that would soon change if they realised that the higher they come, the more they will pay.
They, and their wealth, will disappear overnight!
Wealth is usually defined as “net asset value” or “net worth”. The total value of all assets minus the total value of all liabilities.
Some assets are easy to see, James Dyson’s 36,000 acres are hard to hide and Rod Stewart’s collection of Ferraris is well known! Others are much easier to hide – sometimes physically (yachts can be registered and parked anywhere in the world, as can private jets), sometimes behind complex networks of companies and trusts registered all over the world – especially in tax havens.
Some assets appear obvious. For example, it is obvious that the JCB empire, J C Bamford Excavators Ltd, is owned and controlled by Anthony Bamford and the Bamford family - except that it isn’t! It is owned by J.C.B. Service which is owned by a Dutch company "Transmissions & Engineering Services Netherlands BV" which is owned by … who knows? It is impossible to find out - at least, impossible on the Internet! It all becomes a bit messy.
Sometimes the rich don’t even “own” their own wealth! They take an income from it or rent it from a trust, a charity or a company over which they claim to have no direct control!
An example
Peregrine Andrew Morny Cavendish, 12th Duke of Devonshire, doesn’t “own” Chatsworth House in Derbyshire – he lives in an apartment within it. He set up a trust to “own” the house and the trust leases the house to a charity (to get tax breaks on entrance fees from the public) and Peregrine rents his apartment from the charity. He is a trustee of the charity and his son, William Cavendish, Earl of Burlington, owner of Pratts Club in London, is the chairman - he lives on another Cavendish estate of 8,000 acres at Lismore Castle, County Waterford, Ireland.
Despite Chatsworth having over 600,000 paying customers each year, and himself being worth at least £1 billion (though it is hard to pin down exactly what is his, what belongs to his offspring, what is “corporate” and what is in trusts etc.), Peregrine still has his begging bowl out to repair the cascade.
In October 2024 Peregrine ceased to be a person with significant control of “Charco 1527 Limited” (an “open-ended investment company”). His place was taken by his son – possibly to avoid inheritance tax.
“Charco 1527” is a “member” of at least 5 different LLPs “BRIP 6”, “BRIP 7”, “BRIP 8”, “BRIP 9”, “BRIP 10” each of which has dozens of “members”. All are run by Barwood Capital.
LLPs are notorious for being used to avoid tax.
The inventiveness of clever tax avoidance lawyers should never be underestimated.
Nothing above done by the Cavendish family appears to be illegal but it serves as an example of how difficult it is to tie down “wealth” and who it belongs to. In their case, everything seems to be within the UK but imagine how difficult it would be if it was spread across multiple countries and tax havens – as is the case with the JCB empire.
The Grosvenor family, Dukes of Westminster and friends of William the Conqueror, have land holdings all over the world - they are a property multinational and they make big use of trusts to ensure that their estates are not broken up and taxes are avoided.
Who reports wealth?
HMRC knows about bank accounts, building society accounts and pension funds. Beyond that things quickly become vague - so who is going to find out what wealth belongs to whom?
A wealth tax is is self reporting.
It assumes that the wealthy will sit down, with their lawyers, and draw up a complete list of their assets along with their current value.
How do we decide who has to fill in such forms? Do we all have to do it?
Is it possible that the wealthy might underestimate their wealth - or even tell fibs?
“Oh, those few million! They’re not mine, they’re in a trust fund for my children by my first wife.”
Wealth is relatively easy to hide
Apart from physically hiding things (gold is at a record high at the moment!) there are lots of tools available to smart lawyers. For example:
trusts (in the UK or in tax havens),
hiding assets behind companies registered outside the UK
non-dom status (“not resident in the UK for tax purposes”).
The sort of decent, honest, well-meaning people who propose a wealth tax simply underestimate the greed, selfishness and power of many (most?) wealthy people.
How is the tax enforced?
Other countries have found that it is incredibly expensive to administer and it brings in a fraction of the amount expected. Almost every one has abandoned it.
It is impossible to police. It would need tens of thousands of additional staff at HMRC knocking on doors. “The Under The Bed Squad!”
A charter for whistleblowers
In March 2025 Rachel Reeves, the Chancellor of the Exchequer, announced that whistleblowers who inform HMRC about tax-dodging will get a cut of any money collected as a result.
“‘ere, that chap at Number 9 has a couple of Lamborghinis parked in his garage!”
Imagine the amount of time wasting and score settling that will go on!
Maybe …
Given all the hassle of wealth taxes, it might be simpler to ask “the rich” to make a voluntary contribution of additional tax. Easy to do and probably equally ineffective.
A far better way
Land Value Tax is an indirect tax on wealth since most wealthy people invest, directly or indirectly (like Peregrine Cavendish), in property and land.
LVT is simple to understand - and by scrapping local taxes it reduces the size of the tax code.
LVT is fair - it spreads the cost of Local Authority services fairly across the country.
LVT is impossible to avoid - you can’t hide land - so it costs almost nothing to enforce.
LVT creates very unhappy lawyers - but there’s a downside to everything!