wealth tax

(redirected from Wealth (Net Worth) Tax)
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Wealth Tax

A tax levied on a person's or company's net assets, as opposed to income. For example, if a person has a net worth of $1 million, the government may assess a wealth tax on this amount over and above the tax on that person's income. Proponents believe this tax promotes equality while critics maintain it discourages accumulation of wealth, which is thought to drive economic growth.
Wealthclick for a larger image
Fig. 89 Wealth. The distribution of marketable wealth in the UK, 2002. The total includes land and dwellings (net of mortgage debt), stocks and shares, bank and building society deposits and other financial assets, but excludes life assurance and pensions. (Source: Social Trends, 2004).

wealth tax

a 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 tax

a 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.