Wealth taxation in Scotland: a literature review
An independent review of the evidence on wealth taxation in Scotland. The report examines how wealth is currently taxed in Scotland, lessons from international wealth taxes, and the practical, administrative and behavioural considerations for any future Scottish wealth tax.
Footnotes
1 Property wealth is sometimes described as ‘unrealised wealth’, as a primary residence that has appreciated in value may constitute a high-value asset but does not generate realised wealth until the property is sold. However, owner-occupiers can realise some of the value of the asset while still residing in it.
2 While rental income is typically classified as passive income, as it arises from owning an asset rather than direct labour, more intensive property management (e.g. managing multiple properties or short-term lets) may resemble actively earned income in economic terms. However, tax systems generally continue to treat such income as property income rather than employment income.
3 In practice, some forms of wealth, such as pension savings, may raise concerns about ‘double taxation’, where income is taxed when earned and again if included in the wealth tax base. The treatment of pensions and similar assets would therefore depend on the specific design of the tax.
4 See UBS (2025), Global Wealth Report 2026 (accessed 2 March 2026).
5 See Kuhn (2025), US wealth inequality in 2022 (accessed 2 March 2026).
6 See How the Sunday Times Rich List was compiled (paywalled link) (accessed 20 March 2026).
7 See, for example, Future Economy Scotland and Tax Justice Scotland.
8 The table is adapted from Table 1 in Krenek and Schratzenstaller (2018). Updated revenue figures are taken from Neidle (2025), and updated rates and exemption thresholds from Tax Foundation Europe (2025). All other information follows the original table, particularly for abolished net wealth taxes, for which the historical details are reproduced as reported in the source.
9 The table is adapted from Table 1 in Krenek and Schratzenstaller (2018). Updated revenue figures are taken from Neidle (2025), and updated rates and exemption thresholds from Tax Foundation Europe (2025). All other information follows the original table, particularly for abolished net wealth taxes, for which the historical details are reproduced as reported in the source.
10 Estimates of the elasticity of taxable income are not directly comparable to wealth elasticities. The HMRC (2021) estimates relate to short-term responses, primarily capture marginal behavioural changes (e.g. adjustments in earnings), and focus on earned income. By contrast, wealth elasticity estimates reflect longer-term responses (e.g. over 4–8 years) and capture a broader range of behavioural channels, including avoidance and portfolio adjustment.
11 The values in this table are reported exactly as presented in the original source and may therefore reflect outdated estimates, particularly for existing wealth taxes. All sources are included in the reference list; where papers have subsequently been updated, the most recent versions are cited.
12 Bunching analysis captures behavioural responses around tax thresholds and may not detect avoidance or evasion that occurs away from these points. As such, it often provides a partial measure of behavioural responses to wealth taxation.
13 A small adaptation has been made to this figure regarding underreporting of assets when third-party reporting is used, reflecting findings from Norway as in Ring (2024) and Iacono & Smedsvik (2024)