Could a wealth tax ever work in Britain?
Targeting the richest members of society, a wealth tax is applied to the total value of an individual's assets, such as property, investments and savings.
While the UK doesn't currently have a 'wealth tax' specifically, people do already pay tax on these assets – through capital gains tax, dividend tax and savings tax. However, some argue that a separate levy could help fund vital services by requiring the very richest to contribute more.
Here, Telegraph Money explains what a wealth tax is, how it works in other countries and what it might look like in the UK.
What is wealth tax?
Countries with a wealth tax
How could wealth tax work in the UK?
Benefits of wealth taxes
Issues with wealth taxes
What is wealth tax?
A wealth tax is a tax levied on the total value of an individual's assets, rather than their income, according to Michaela Lamb, tax partner at chartered accountants, Gravita.
She said: 'It typically applies to net wealth, including property, investments and other valuables above a certain threshold, less debt. It's usually done on an annual basis, where you have to declare the net value of your assets at the end of the year.'
This type of tax is often proposed to reduce economic inequality by redistributing wealth from the richest individuals, helping to address the widening gap between the wealthy and the rest of society.
Countries with wealth tax
Were the UK to introduce a wealth tax, it would join a relatively long list of countries that already have this levy in place. These include:
Spain – Spain's wealth tax is a progressive tax ranging from 0.2pc to 3.5pc on assets above €700,000 (£592,000), with rates varying depending on region. It also has a 'solidarity tax' ranging from 1.7pc to 3.5pc on wealth over €3m.
Norway – Norway's wealth tax is charged at a rate of 1pc on wealth stocks exceeding NOK 1.7m or 1.1pc on net wealth exceeding NOK 20m.
Switzerland – This is charged at the cantonal level and covers worldwide assets. Rates vary by canton.
France – France abolished its net wealth tax in 2018 and introduced a real estate wealth tax. This applies to real estate assets valued at €1.3m or above and the tax ranges to 1.5pc.
Italy – Italy levies two taxes on foreign assets held by Italian residents – one on real estate and one on foreign financial assets, such as stocks and bonds.
Belgium – The solidarity wealth tax rate is 0.15pc on securities accounts that reach or exceed €1m.
Argentina – Argentina's wealth tax rate ranges from 0.5pc to 1.1pc for 2025.
Colombia – Colombia's wealth tax rate ranges from 0.5pc to 1.5pc for individuals whose net worth equals or exceeds 72,000 Tax Value Units (UVT).
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