A Wealth of Difference: Reforming the taxation of 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.