Reports suggest a Wealth Tax for Millionaires

The BBC have published an article suggesting that a one off “wealth tax” may be on the cards.

The BBC have reported that the Wealth Tax Commission has suggested that, rather than increasing income tax or VAT (which would have a much wider effect on the population), the government should instead look at introducing a wealth tax on millionaires. The Wealth Tax Commission have said that this would be fairer than raising tax on incomes or goods people buy. Dr Arun Advani, the author of the report, is quoted as saying “we’re often told that the only way to raise serious tax revenue is from income tax, National Insurance contributions or VAT. This simply isn’t the case, so it’s a political choice where to get the money from, if and when there are tax rises.”

The BBC reports that the suggested wealth tax would include all assets such as main homes, pensions, business interests and financial wealth; and would be paid by all UK residents, including “non-doms”.

I recently suggested tax rises or reforms are coming down the tracks in order to assist with funding the £280 billion spent on measures introduced to fight COVID-19 and support the economy this year alone. It seems that these changes are getting ever closer and are starting to focus on those assets which have traditionally been very tax advantageous (such as pensions and business interests).

Although the finer details of any such proposal are yet to be determined, what the Wealth Commission’s report does clearly demonstrate is that now is the time for those with personal wealth (including those whose properties bring their overall wealth up to or over £1 million –  which, given property prices in the south-east, could push more people into the taxable bracket than is perhaps realised) to review their affairs.

It seems that all we can do at the moment is await developments to see what formal proposals are put forward but I would certainly urge anyone who may find themselves in the bracket of having a net worth of more than £1 million to consider their assets and whether there is anything that can be done to protect that wealth either from significant tax increases or to ensure that it can be passed on to future generations.

Contact our specialist tax planning lawyers in West Kent (Hadlow), Ashford, Brighton & Hove and Uckfield

Bruce Clarke leads Rix & Kay’s Private Client Team. With eleven years’ experience of advising individuals on how to effectively manage their personal wealth, he has a detailed understanding of personal tax planning, creation of trusts and the administration of estates. Contact Bruce for more information and an informal chat about your options for estate planning. E. bruceclarke@rixandkay.co.uk t. 01732 440 853