Valuation for the purposes of a wealth tax

Journal article

This paper considers the scale and prevalence of valuation issues under a wealth tax. Valuation issues are frequently cited in the literature as the most difficult aspect of wealth taxes. We examine some of the most problematic asset types from a valuation perspective. We also consider a range of solutions to manage these concerns, drawing on international experience and the approaches already taken for other taxes within the UK system. We conclude that satisfactory options for arriving at a value for wealth tax purposes are available even for the most problematic assets. We also estimate that the absolute number of taxpayers likely to pay substantial valuation fees is small, and that, in aggregate, valuation costs could be contained to around 0.1 per cent or less of total chargeable assets, even if they are substantial for some individual taxpayers.

Authors: Daly, S; Hughson, H; Loutzenhiser, G

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Wiley
• Journal: Fiscal Studies: The Journal of Applied Public Economics
• Volume: 42
• Issue: 3-4
• Pages: 615-650
• Publication date: 2021-10-25
• Acceptance date: 2021-08-27
• DOI: 10.1111/1475-5890.12287
• EISSN: 1475-5890
• ISSN: 0143-5671
• Language: English
• Keywords: artwork; residential property; tax policy; pension assets; valuation; banding; FFR; open market value; net wealth tax; agricultural property; business assets