One of the issues often raised with plans to introduce is wealth tax is the problem of valuation. Aside from political issues around the tax base, and assuming that value should be determined by reference to market value, how does one go about valuing assets which are not often sold on the open market and thus for which there might be little information from which to estimate value: intellectual property and shares in small private businesses for instance? How many people would, in reality, be confronted with difficult valuation issues and how much would it cost them to hire valuation experts?

In a paper recently published open access in Fiscal Studies, Glen Loutzenhiser (Oxford), Helen Hughson (LSE) and I consider the scale and prevalence of valuation issues under a wealth tax. 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.