James Ward, head of our Private Client team, was quoted in Solicitor's Journal, Accountancy Daily, Professional Advisor, Investment Week and International Investment on 9 December 2020. James was commenting on a proposed wealth tax on UK individuals by the Wealth Tax Commission as a response to the effects of the Coronavirus Pandemic.
A direct tax simply on existing wealth has never existed in the UK although stamp duty, inheritance tax and other taxes are, of course, effectively ‘wealth’ taxes.The 1% above £500k as a one-off tax is an interesting concept which would certainly raise a lot of money and lessen the need to significantly reform current taxes.
However, a government would have to be exceptionally brave politically to consider introducing such a tax - even on the back of the unprecedented and costly Coronavirus situation which we all understand needs to be paid for. There would need to be alternative method of payment options for asset rich, cash poor individuals and careful consideration would need to be given as to how mortgages come into play. Someone may have a £1m house, for example, but have debt of over £500,000 and therefore be under the threshold.
What else contributes to the wealth level should arguably also be taken into account - cash, investments, overseas property, cars, paintings, wine etc - and as a result some creative avoidance methods could emerge."
You can read the full articles below:
- Proposed wealth tax an 'exceptional' crisis response - Solicitors Journal
- Call for one-off £260bn wealth tax - Accountancy Daily
- Covid wealth tax proposals 'unlikely' to progress under Tory government - Professional Advisor
- Covid wealth tax proposals 'unlikely' to progress under Tory government - Investment Week
- Report proposes 5% UK wealth tax to offset pandemic costs - International Investment
Should you have an queries regarding the issues raised in this blog please contact our Private Client Team.
About the author
James Ward heads the Private Client team at Kingsley Napley and is tasked with overseeing the continued development of the private client offering for both existing and new clients of the firm. His objective is for the Private Client team to offer the highest quality legal, practical and commercial private client advice for both domestic and international families and individuals.