A Wealth of Difference: Reforming the taxation of wealth

Article

The UK is a wealthy nation but that wealth is very unevenly distributed. This has negative implications for both economic prosperity and justice. These issues are set to become more important as technological change, stagnating wages and rising house prices increase the income and gains that can be made from wealth.

The UK’s system of wealth taxation currently fails to tackle these issues. In fact, it frequently exacerbates them by creating opportunities for avoidance, distorting investment decisions, poorly capturing wealth transfers and undertaxing income from assets, particularly housing. This is unjust.

In this paper we make five recommendations which together amount to a transformation of the tax treatment of wealth in the UK. We recommend that all income from wealth is taxed under the income tax schedule; that inheritance tax is abolished and replaced with a lifetime donee-based gift tax; and that that non-domiciled status is removed and trusts are reformed to be more transparent. We also propose the reform of property taxes through the replacement of council tax with an annual property tax, and the replacement of business rates with a land value tax.

Related items

  1. A huge overflowing recycling bin full of discarded empty bottles of alcoholic drinks

    Taking stock: Counting the economic costs of alcohol harm

    Alcohol consumption across the UK is increasing. Government and employers must act to address the health risks.
  2. The inside of a bus. Lots of people sit or stand on a bus during daylight

    A people-focussed future for transport in England

    Our findings from three roundtables on the impact of transport in people’s lives and the priorities for change.
  3. Many national flags against blue sky

    Progressive renewal: The Global Progress Action Summit

    A quarter of the way through this century, change is in the air. Everyone, everywhere, seemingly all at once, wants out of the status quo.