Wealth Tax
A progressive annual tax on net assets above £100k, excluding UK-invested pensions. Starting at 0.8% and rising to 5.3% on wealth over £25 million.
The measure
Net assets are valued each year and Wealth Tax is charged according to one of seven bands. The tax can be paid in monthly instalments over the following year. UK-invested pension savings are completely exempt.
The seven bands:
| Net wealth | Annual rate | Share of households |
|---|---|---|
| Under £100,000 | 0% | ~40–45% |
| £100,000 – £500,000 | 0.8% | ~45–48% |
| £500,000 – £1m | 1.0% | ~7–9% |
| £1m – £3m | 1.5% | ~2–3% |
| £3m – £10m | 2.5% | ~0.3–0.5% |
| £10m – £25m | 4.0% | ~0.03–0.07% |
| Over £25m | 5.3% | ~0.01% or less |
Taxing wealth more than work is the right thing to do, so even those with modest wealth pay a modest amount.
In practice: someone with £200k in savings and a modest UK pension would pay £800 per year, or £67 a month.
A pensioner with a valuable house and limited income qualifies for Wealth Tax Deferral. This means nothing is due until the property is sold.
Well managed wealth grows. It’s like having a bag of 100 sweets. If you put the bag in the right place, each year you might find another 6 or 7 sweets in there, without you needing to do anything. The Wealth Tax leaves most people with most of this bonus, but takes one or two to build and maintain the country which made that wealth possible. Nothing could be fairer.
Expected impact
- Wealth is better invested in productive assets
- National productivity and economic growth increases
- Boom in UK pension fund investment which unlocks further productive capacity for the economy
- Decades of decline halted through investment in real growth
Cost and revenue
| Revenue source | Annual |
|---|---|
| Progressive wealth tax (0.8–5.3% on net wealth above £100,000) | +£84.75bn |
| Exit Tax (25% on net wealth over £1m for emigrants) | +£3bn |
| Agricultural land exemption (foregone revenue) | −£1.25bn |
| Net new revenue | +£86.5bn/year |
The deferral mechanisms reduce short-term revenue by less than £2bn annually. Deferred amounts are recovered when assets are sold, so long-term yield is not significantly affected.
Evidence and assumptions
When returns to capital exceed the growth rate of the economy, wealth concentrates. The wealth tax does not reverse decades of decline entirely. But it slows it, and it redirects the revenue toward the things a growing economy actually needs.
Appreciation is the result of scarcity, population growth, infrastructure investment, planning decisions and the general functioning of society. The tax applies to that appreciation — a fair share of something never entirely privately generated.
Agricultural land is exempt because working farms depend on land they cannot easily sell and receive no passive income from holding it. The exemption mirrors current Inheritance Tax agricultural property relief and costs £1.25bn in foregone revenue — 1.4% of the total yield.