Spain has a formula for this. Where a company's accounts are unaudited, article 16 of Ley 19/1991 sets the taxable value of its shares at the greatest of three figures: the nominal value, the theoretical value taken from the last approved balance sheet, or the average profits of the three preceding closed financial years capitalised at 20 per cent, which works out as a multiple of five.
It is a blunt instrument.
It is also a number the tax office can defend and the taxpayer can contest, assembled from documents the company has already filed. Nobody has to guess what a willing buyer might pay on a day when no buyer exists. The statute states what the figure is, and the argument moves on to whether the accounts behind it are sound.
The objection at full strength
An unlisted business has no market price. No screen shows what a family engineering firm in the West Midlands is worth on a Tuesday afternoon, and two competent valuers working from the same accounts will reach different numbers. Levy an annual charge on a figure nobody can pin down and you have taxed the valuer's judgement instead of the asset. Anyone arguing for a wealth tax who waves that away has not met the objection.
Norway's Ministry of Finance told the Wealth Tax Commission's researchers that a wealth tax causes more challenging valuation issues than other taxes, for taxpayers and for the tax authority alike. The concession comes from a ministry that levies one.
The question is not whether a private company can be valued. It is what each answer costs.
Three countries already answer it
Switzerland, Norway and Spain all levy annual net wealth taxes, and all three therefore put a number on unlisted shares every year. Each has absorbed a different part of the problem the objection describes.
Switzerland absorbs it through judgement. Assessment sits with the cantons, and the federal tax administration holds no information about what the tax costs to run, because it is levied by cantons and municipalities. That was the answer the Wealth Tax Commission received when it wrote to ask. Closer valuations are bought with more argument about them.
Norway went the other way. It accepts valuations that diverge systematically from market value, in exchange for rules that can be applied at scale to every taxpayer on the same assessment date. It has also attacked the cash problem separately: from income year 2026, an owner may defer the wealth tax attributable to business assets for up to three years, where the amount deferred is at least NOK 30,000, paying the Norges Bank key policy rate plus five percentage points on what is deferred.
The scale explains the choice. Norway's net wealth tax begins above NOK 1,900,000 of net wealth, far below the extreme-wealth thresholds this series discusses, so the valuation machinery has to run across a wide filing population every year. At that width, rules that are wrong by a knowable margin are what is available.
Spain concedes the base instead. Qualifying active family-business holdings are exempt where the owner holds at least 5 per cent of the company individually, or 20 per cent within the family group, and genuinely runs it, with that role paying more than half of their total business, professional and work income. The article 16 formula then governs whatever is left standing after the exemption has taken its share. The exemption is pro-rata: it reaches only assets necessary for the activity, so passive assets inside an operating company stay in charge.
Where the formula does apply, the result is arithmetic. A company with unaudited accounts and a settled profit record will be taxed on five times its average profits over the three preceding closed financial years, unless nominal or book value comes out higher. That is a number attached to a business, arrived at without asking what anyone would pay for it.
Every one of the three gave something away.
What no design gets
The pattern holds across all of them. No operating wealth tax achieves accurate annual valuation, low administrative cost, neutrality between asset classes and full liquidity protection together. Switzerland pays for accuracy in disputes. Norway pays for administrability with valuations it knows are wrong. Spain pays for workability with an exemption wide enough to let a great deal of family business capital through untouched.
The trade is unavoidable. The only choice is which way round to make it.
The statutory provisions are solid. The size of the resulting valuation errors, and how often a tax bill forces a sale, are not known.
The cost of the exercise is almost as poorly served. When the Wealth Tax Commission asked the three operating jurisdictions what their wealth taxes cost to administer, it obtained only indicative evidence; Norway's finance ministry held no separate reports or estimates at all, and the Swiss federal administration held none because the tax belongs to the cantons, though some cantons did supply figures of their own.
What a formula actually buys
A formula puts a floor under the argument. Spain's rule hands the taxpayer a number to start from and the authority a number to defend, so the dispute runs on inputs: whether the balance sheet was properly approved, whether those three years of profits are the right three. That is a smaller and cheaper fight than an argument about which method should have been used at all.
Frequency is the other lever, and it is the one the objection usually leaves out. Assets that move slowly do not have to be priced afresh every January. The revaluation cycle is one of the design choices a wealth tax's running cost turns on, alongside the breadth of the base, the threshold, the filing population and the dispute process, which is why any confident cost figure is a model output.
The system already does this once
Britain values private companies already, at the worst possible moment for the family concerned. Where inheritance tax falls on relevant business property, section 227 of the Inheritance Tax Act 1984 allows the bill to be paid in ten equal yearly instalments by written election, with the unpaid balance falling due at once if the asset is sold. Finance Act 2026 extended that election to relevant business property from 6 April 2026.
Instalments presuppose a figure. Somebody has already worked one out. The precedent is a transfer tax. Run annually, ten-year instalments would overlap, each year's charge stacking on the last.
What actually changes
The model this series references begins above £10 million in individual net wealth after relevant liabilities. The West Midlands engineering firm meets it only where its owner's own net wealth passes that line.
A tax system that already values private companies at death can value them during life. What changes is how often the exercise has to be done, and how much error the system is prepared to live with while it does it.
The objection is a question about accuracy. The answer, everywhere it has been tried, is a set of rules that are wrong in a predictable direction and cheap to apply.
Sources and evidence status
Ley 19/1991 del Impuesto sobre el Patrimonio, Art. 16 — valuation of unlisted shares (KB-084). Ley 19/1991, Art. 4.Ocho — exemption for qualifying family-business holdings (KB-082). Skatteetaten, Defer payment of net wealth tax calculated on business assets — Norwegian deferral, from income year 2026 (KB-080). Skatteetaten, Net wealth tax and valuation discounts (2026 table) — rates and thresholds (KB-081). Inheritance Tax Act 1984, s.227, as amended by Finance Act 2026 c.11 — instalment election (KB-085). Burgherr, D., The costs of administering a wealth tax — Wealth Tax Commission Background Paper no. 126, 2020 (KB-087, KB-091, KB-092). Comparative design position: KB-042 and KB-086. Threshold of the model this series references: a policy proposal, not enacted law (KB-002).
The statutory provisions are T8 Legal or Regulatory Statements, verified against primary sources on 12 August 2026 and current at that date. Rates, thresholds and reliefs in all four jurisdictions are reset or amended regularly; the Norwegian deferral is months old and the UK instalment provision was amended by Finance Act 2026, so no provision here should be relied on without checking its date. The claim that no operating design resolves valuation, cost, neutrality and liquidity together is T5 Economic Interpretation. Confidence on the size of valuation errors and on observed forced sales is low, and this article does not assert a magnitude for either.
Nothing here is an estimate for a UK tax on wealth above any particular threshold, and nothing here is tax advice.
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