- No formal wealth tax legislation has been introduced in the UK as of June 2026. Proposals remain at the discussion and advocacy stage.
- The Wealth Tax Commission (2020) modelled a one-off wealth tax at 1% per year for five years on net wealth above £500,000 per individual, estimated to raise £260bn.
- Andy Burnham and allied Labour figures have called for a recurring annual wealth levy as part of local and regional funding reform.
- The UK currently taxes wealth indirectly through Capital Gains Tax, Inheritance Tax and the additional rate of Income Tax - but not as a direct annual charge on net assets.
Last reviewed: 28 June 2026
There is no active UK wealth tax as of June 2026. Proposals from Labour-aligned politicians and think tanks advocate for an annual levy on net wealth above a threshold, but no legislation has been introduced. The UK taxes wealth through existing mechanisms including Capital Gains Tax, Inheritance Tax and higher-rate Income Tax.
| KEY FACTS - UK Wealth Tax Landscape | |
|---|---|
| Legislation status | No active bill - proposals at advocacy stage only |
| Wealth Tax Commission model (2020) | 1%/yr for 5 years on net wealth above £500k per individual |
| Revenue estimate (WTC model) | £260bn over 5 years |
| Existing wealth taxes in UK | IHT (40% above nil-rate band), CGT (18-24%), Council Tax |
| HMRC wealth distribution | Top 10% hold approx. 57% of total UK household wealth (ONS WAS) |
What Is a Wealth Tax?
A wealth tax is an annual charge levied on an individual's net assets - total assets minus total liabilities - above a defined threshold. It differs from Income Tax, which is charged on earnings, and from Capital Gains Tax, which applies when assets are sold. A wealth tax would apply to the stock of wealth held, not the flow of income or gains from it.
Several European countries operate or have operated wealth taxes, including Norway (which reintroduced a higher rate in 2022) and Switzerland. France abolished its general wealth tax (ISF) in 2017 and replaced it with a narrower property wealth tax (IFI). Spain maintains a wealth tax varying by region.
The Burnham and Labour-Ally Proposals
Greater Manchester Mayor Andy Burnham and a group of Labour-aligned politicians and local authority leaders have publicly called for a UK wealth levy as part of a broader argument for regional funding reform. The proposals - which are not HM Treasury or Labour frontbench policy - generally advocate for an annual charge on net wealth above a threshold of £1m or £2m, with proceeds directed partly to local government.
These proposals are at the advocacy and consultation stage. No bill has been presented to Parliament and HM Treasury has not commissioned formal costing of these specific proposals as of June 2026.
The Wealth Tax Commission Findings
The Wealth Tax Commission, an independent academic body, published a detailed report in 2020 modelling a one-off UK wealth tax. Its central scenario proposed a charge of 1% per year for five years on net wealth above £500,000 per individual (£1m per couple), with property, pensions and business assets included.
The Commission estimated this would raise approximately £260bn over five years. It also modelled exemptions and instalments for asset-rich but cash-poor individuals such as older homeowners.
The Commission's work remains the most detailed modelling of a UK wealth tax to date. Its findings are publicly available and have been cited in subsequent parliamentary debates.
How the UK Currently Taxes Wealth
The UK does not levy a direct annual charge on net assets. Wealth is taxed through several existing mechanisms:
- Inheritance Tax: 40% on the value of an estate above the nil-rate band (£325,000 in 2026/27, or £500,000 with the residential nil-rate band) when a person dies.
- Capital Gains Tax: 18% (basic rate) or 24% (higher rate) on gains from selling assets such as property (other than a main home), shares and business assets.
- Income Tax additional rate: 45% on income above £125,140 per year in 2026/27.
- Council Tax: a property-based local tax, widely criticised as regressive due to its banding structure unchanged since 1991.
ONS Wealth and Assets Survey data shows the top decile of UK households by wealth held approximately 57% of total aggregate household wealth as of the most recent survey wave.
Frequently Asked Questions
Does the UK currently have a wealth tax?
No. The UK has no annual levy on net assets. Wealth is taxed indirectly through Inheritance Tax on death, Capital Gains Tax on disposal of assets, and Income Tax on returns generated by wealth. A direct annual wealth tax would require new primary legislation.
Who would be affected by the proposals being discussed?
The proposals under discussion generally target individuals with net wealth above £500,000 to £2m, depending on which model is cited. ONS data indicates that net property wealth is the largest component of wealth for most UK households in this range, meaning many asset-rich but income-modest households - particularly older homeowners in high-price regions - could fall within proposed thresholds.
Have any other countries recently introduced wealth taxes?
Norway increased its wealth tax rate to 1.1% in 2022 on wealth above 1.7m Norwegian krone. Spain's autonomous communities set their own rates within a national framework. Several countries that previously had wealth taxes - including Sweden, Germany and France - have abolished or narrowed them, citing capital flight and administrative complexity.
What is the Wealth Tax Commission?
The Wealth Tax Commission was an independent body funded by the Economic and Social Research Council and hosted by the London School of Economics. It published its final report in December 2020. It was not a government body and its recommendations do not carry legislative authority.
