Global Shift Towards Private Wealth Taxation

A significant transformation is underway in global fiscal policy: a renewed and intensified focus on taxing private wealth. This shift marks a clear departure from decades of declining wealth taxation and reflects a coordinated international effort to address inequality, rebuild public finances, and respond to mounting political pressures.

Key Drivers of the Shift

1. Rising Inequality and Political Pressure

In the post-pandemic period, wealth concentration has accelerated, with the top 1% capturing a disproportionate share of new wealth. This trend has intensified public demands for fairness, reflected in movements such as “tax the rich” and in proposals advanced by political figures including Elizabeth Warren in the United States and Thomas Piketty in Europe.

2. Post-Pandemic Fiscal Needs

Governments are confronting historically high debt levels resulting from COVID-19 stimulus measures, alongside new and growing expenditure needs related to the climate transition, defense, and aging populations. Wealth taxes are increasingly viewed as a revenue source that avoids broad increases in taxes on labor or consumption.

3. Erosion of Traditional Tax Bases

Globalization and digitalization have made corporate income taxation more difficult to enforce. By contrast, wealth—often relatively immobile and more transparent—offers a potentially more stable tax base.

4. International Coordination Reducing Evasion

Initiatives such as the OECD’s Global Minimum Tax (Pillar Two) and the automatic exchange of financial information under the Common Reporting Standard (CRS) have reduced opportunities for concealment, increasing the feasibility of comprehensive wealth taxation.

Wealth taxes—direct levies on an individual’s net assets—are experiencing a notable renaissance after decades of decline. From their peak in the 1990s, when 12 OECD countries imposed net wealth taxes, to their near extinction by 2020—when only Norway, Spain, and Switzerland retained them—we are now witnessing a surprising reversal. This resurgence represents one of the most consequential shifts in contemporary fiscal policy.

Key Findings

Revenue Potential
A modeled 4% “Wealth Proceeds Tax” could generate more than $45 billion annually for state governments.
Focus on Unrealized Gains
Recent federal-level proposals include a 25% minimum tax on unrealized gains for individuals with net wealth exceeding $100 million.

State-Level Adoption
Several U.S. states are considering so-called “millionaire taxes,” which often function as income surtaxes applied to annual earnings above specified high-income thresholds.

Economic Criticism
Critics argue that wealth taxes may hinder economic growth, are costly to administer, and frequently generate less revenue than initially projected.

Democratic Rationale
Supporters contend that taxing the ultra-wealthy is necessary to sustain the public sector and to curb the disproportionate political influence associated with extreme concentrations of wealth.

For HNWIs & Families:
The era of effortless dynastic wealth transfer is over. Succession planning has become more critical, more complex, and more expensive than ever. It now demands a long-term horizon (measured in decades, not years), sustained professional advice, and often difficult family conversations around control, governance, and liquidity.

For Advisors (Lawyers, Wealth Managers):
Demand for sophisticated, cross-border estate planning is accelerating rapidly. The advisor’s role has evolved from pure tax minimization to holistic risk management—addressing regulatory compliance, ensuring liquidity for future tax liabilities, and structuring wealth to withstand legal, regulatory, and familial challenges.

For Jurisdictions:
A new competitive dynamic is emerging. While some countries raise or debate higher taxes (e.g., proposals in the US, discussions in the UK), others are positioning themselves as “Wealth Preservation Hubs.” Jurisdictions with no inheritance tax (such as Singapore and Switzerland for foreigners), or with favorable regimes (like Italy’s flat tax for new residents), are actively courting mobile capital. The US, despite its high federal estate tax, remains attractive due to its strong legal framework and dynasty trust laws in states such as South Dakota and Nevada.

Tax authorities worldwide are increasingly clarifying—and in some cases expanding—the definition of private income to capture revenue arising from modern wealth structures, digital activities, and complex family holdings. Broadly, this trend reflects a shift away from narrow definitions of “salary” toward more comprehensive “economic substance” frameworks that encompass income from digital assets, rental properties, and private investment vehicles.

Traditional tax systems are built around physical presence—where work is performed—and tax residency—where an individual maintains a permanent home. Digital nomads disrupt this framework in several ways: they often lack a fixed workplace; their economic ties, such as clients or bank accounts, may be located in a third country; and they may reside in a jurisdiction for extended periods without becoming formal tax residents, enabled by tourist visas or new digital nomad visas (DNVs).

For years, this dynamic created a “gray zone” in which nomads could frequently fall through regulatory gaps and pay little to no income tax. Governments are now systematically closing these gaps.

Fernando Del Canto highlights that this emerging “Pillar 3” framework is likely to include the following elements:

Minimum Global Wealth Taxes
 A potential standardized approach to taxing individuals’ accumulated wealth, rather than focusing solely on income.

Harmonized Inheritance Rules
 Greater alignment of inheritance tax rules across jurisdictions to reduce opportunities for avoidance and evasion.

Anti–“Tax Nomad” Measures
 Stronger regulations targeting individuals who move between jurisdictions primarily to avoid taxation, with an emphasis on assessing true economic substance.

Del Canto advises clients with international assets to focus on three key areas in preparation for this shift:

Economic Substance
 Ensuring that activities reflect genuine substance rather than artificial arrangements, particularly in light of recent Court of Justice of the European Union (CJEU) rulings.

Proactive Compliance
 Staying ahead of evolving tax laws and regulatory changes to mitigate the risk of penalties.

Transparency
 Adapting to increased reporting requirements and the growing exchange of information between tax authorities.

Del Canto frequently addresses these themes in the context of Spanish tax reforms, UK tax enforcement, and the broader European Union tax landscape.

Fernando typically structures his advice around three pillars: Tax Residence: Carefully selecting—or relinquishing—tax residency in a favorable jurisdiction. Asset Holding Structures: Using trusts, foundations, and corporate vehicles in well-regarded jurisdictions (not necessarily “tax havens”) to hold and manage assets. Source and Type of Income: Structuring income to be inherently tax-efficient (for example, capital gains, which may be exempt in certain residencies, rather than salary).

• Permanent home: Whether you maintain a dwelling (owned or leased) that remains available for your use.
• Family and social ties: Whether a spouse, common-law partner, or dependent children reside in the country.
• Economic ties: Ongoing bank accounts, investments, pensions, credit cards, business interests, or directorships.
• Administrative ties: Possession of a driver’s licence, voter registration, or professional memberships.
• Intent and pattern of life: Whether your personal belongings, health insurance, and overall lifestyle indicate an intention to return.

1. A greater focus on wealth taxes.
2. A definition of personal income that includes unrealised capital gains.
3. A focus on nomads which includes center-of-life residence tests, enhanced information sharing, questioning the validity of residence certificates issued by jurisdictions where the 183-day residency rule is not required, and exit taxes.

1. Anticipate changing regulations.
2. Focus on substance over form.
3. Focus on compliance and transparency.