wealth tax(redirected from Net worth tax)
Also found in: Dictionary.
wealth taxa DIRECT TAX imposed by the government on a person's private assets when those assets are transferred to the person's beneficiaries. Wealth taxes are used by governments principally as a means of promoting social equity by reducing disparities in WEALTH holdings. In the UK INHERITANCE TAX is the current means of taxing wealth.
wealth taxa TAX levied on a person's private ASSETS when those assets are transferred to the person's beneficiaries. Wealth taxes can be used to redistribute WEALTH within the community as part of government policy on INCOME DISTRIBUTION. The UK's wealth tax has taken various forms over the years, notably estate duties, capital transfer tax and (currently) inheritance tax.
Currently (as at 2005/06) ‘chargeable assets’, such as houses, stocks and shares up to a ‘threshold’ value of £275,000, are tax-exempt. Above £275,000, inheritance tax is levied at a flat rate of 40%. Assets transferred more than seven years before the donor's death are exempt from tax, while assets transferred between three and seven years before death are taxed at a lower rate.