THE GENERATIONAL RESET

Key Proposals

1. The Problem With a Single Instrument

The Economic Renewal pillar makes the structural case for moving the tax base from labour income to inherited wealth. That argument holds. The income tax base is eroding. Household wealth is growing. The baby boomer transfer is the fiscal window. The inheritance tax reform is the right centrepiece of a redesigned revenue architecture.

But the word centrepiece matters. A centrepiece is not the whole table.

The transition gap alone — the shortfall between current income tax receipts and projected inheritance tax revenue during the 15–25 year implementation period — is estimated at £1–4 trillion. The lower end of that range is manageable through a combination of phased implementation and transition financing. The upper end is not manageable through the inheritance tax reform alone. Something else has to contribute during the transition. And several of those something elses are worth having in the long-run architecture regardless of the transition need — because they correct market failures, close avoidance routes, and tax things that should have been taxed all along.

There is also a resilience argument. A fiscal architecture that depends on a single instrument — even a well-designed one — is fragile. Demographic shifts, behavioural responses, implementation capture, legal challenge: any of these can erode a single instrument's yield. A portfolio of instruments, each resting on its own justification, is harder to attack and harder to hollow out.

2. The Incidence Question — Who Actually Pays

Before examining any specific instrument, one analytical principle needs to be established, because it runs through every tax policy argument and is almost never addressed honestly in public debate.

The nominal incidence of a tax — who is legally required to pay it — is not the same as the effective incidence — who actually bears the economic cost.

Corporation tax is legally paid by businesses. But businesses can pass some of the cost to workers through lower wages, to customers through higher prices, and to suppliers through lower purchase prices. The shareholder bears what remains. The precise split between these four groups is contested in the economic literature, but the principle — that a tax on a business is not simply a tax on its owners — is not.

Tariffs are paid by importers. But importers pass the cost to consumers through higher prices. A tariff on washing machines is paid at the border by the importing company and paid at the till by the household buying the machine.

VAT is levied on businesses at each stage of production. The cost is passed forward through the supply chain and ultimately borne by the final consumer.

This matters for three reasons. First, a tax that appears to fall on a business or an industry may actually fall on ordinary households — particularly if the goods in question are essentials. Second, the distributional impact of a tax depends on who actually bears it, not who nominally pays it. Third, understanding incidence is the only honest way to compare different instruments — comparing a tax on corporations to a tax on individuals as if they are different in kind, when in practice both may largely fall on consumers and workers, is not analysis. It is rhetoric.

With that foundation established, the portfolio of instruments.

3. Land Value Tax — The Most Underused Instrument in the Toolkit

3.1 The Principle

Land Value Tax charges an annual levy on the unimproved value of land — what the land itself is worth, separately from the buildings, infrastructure, or improvements on it. It does not tax what you have built. It taxes the fact of ownership of land whose value was created by others.

The argument for LVT has one of the most unusual properties in economic policy: it commands agreement across the political spectrum. Economists from Milton Friedman on the right to Joseph Stiglitz on the left have endorsed it. The IMF, the Resolution Foundation, the Institute for Fiscal Studies, and successive tax reform commissions have all noted its theoretical advantages. It is not a radical or untested idea. It is a well-understood idea that has been politically suppressed rather than analytically rejected.

The core reason for that consensus: LVT is the only major tax with no significant economic deadweight loss. Every other tax distorts behaviour — income tax discourages work, corporation tax discourages investment, VAT discourages consumption. LVT cannot distort the supply of land, because land is fixed. You cannot produce more of it in response to low tax rates. You cannot destroy it in response to high ones. And because the value of land is largely created by public decisions and public investment — a new transport link, a school, a planning permission — taxing that value is capturing a public good that has been quietly privatised rather than taking something that was earned.

3.2 What It Would Tax and What It Would Not

LVT taxes the unimproved land value. It does not tax buildings, improvements, or productive activity on the land. A developer who builds homes increases the value of what sits on the land — that increase is not subject to LVT. A landowner who sits on a plot near a planned infrastructure project and watches the land value rise while doing nothing — that increase is exactly what LVT captures.

The critical design distinction is between use value and speculative value. A farm is worth one amount as farmland. It may be worth dramatically more if planning permission for housing were granted. The speculative premium — the gap between the two — is created entirely by planning decisions, not by the landowner. LVT charged on use value does not penalise farmers for owning land near cities. LVT charged on speculative value does.

The right design: LVT is assessed on use value when the landowner has a legally enforceable commitment — registered on the title — that the land will not be developed. Land without such a restriction is assessed on its full value including any speculative premium. The choice is simple: make the conservation or agricultural commitment legally real, and pay LVT on use value. Retain development optionality, and pay LVT on the full value that optionality represents.

3.3 Agricultural Land — The Honest Design

Farming margins in the UK are thin. Many farms operate at a loss without subsidy. An LVT charge that cannot be offset against productive income would force sales and consolidation — the opposite of the intended effect on land stewardship.

The right approach integrates LVT with the UK's Environmental Land Management Scheme. ELMS pays farmers and land managers for delivering public goods: carbon sequestration, biodiversity management, flood mitigation, habitat creation. Under the integrated design, ELMS income offsets LVT liability for land in genuine productive agricultural or environmental stewardship use. A farm actively delivering ELMS public goods generates income that substantially absorbs any LVT charge. Land held at minimal intensity, without qualifying for ELMS payments, faces the LVT charge without offset. The incentive structure is right: use your land productively, or pay for holding it unproductively.

The steel man is serious and deserves a serious answer. Mass land valuation is not simple, but it is not unprecedented. The Valuation Office Agency already maintains property value assessments for council tax and business rates.¹ These are imperfect — council tax in particular is assessed on 1991 valuations — but the infrastructure exists. The honest response is that a transition to LVT requires a sustained investment in valuation infrastructure and a realistic implementation timeline measured in years, not months. Done properly, the administrative cost is manageable. Done hastily, it is a policy disaster. The sequencing argument — start with the most straightforward cases (urban commercial land, large undeveloped plots) and extend gradually — is more credible than a single-stage national implementation.

3.4 Conservation Land and the Governance Test

Land held for genuine conservation purposes — whether by a charitable body, a land trust, or a privately funded conservation organisation — should attract zero or near-zero LVT on the basis that the public benefit delivered exceeds the value of the tax foregone.

The test for that exemption must be genuine. It rests on two requirements. First: the land must be held under independent charitable governance — no individual or group of connected persons may hold effective control, where "connected persons" is defined consistently with the Companies Act's Persons with Significant Control framework. A charity genuinely governed by an independent board, with no controlling individual or family interest, meets this test. A vehicle designed to shelter personal wealth behind a charitable wrapper does not. Second: the land must be actively delivering its stated conservation purpose, demonstrable through annual public reporting reviewed by the Charity Commission.

These two requirements together close the avoidance route without penalising genuine conservation. An owner who places land under the genuine governance of an independent conservation body has made a real charitable gift. The LVT exemption is the correct reward for that. An owner who wants both the LVT exemption and personal control of the land cannot have both. The design makes the choice explicit rather than leaving it implicit and gameable.

3.5 What LVT Would Raise and What It Would Replace

UK land — excluding improvements — is estimated to be worth in the region of £5 trillion, of which urban and residential land constitutes the majority. An LVT rate of 1% on assessable land value — excluding genuinely productive agricultural land and certified conservation land — could in principle raise £30–50 billion annually at the outset, rising as the assessment infrastructure matures. That figure is sensitive to exemption design and valuation methodology, and should be treated as an order of magnitude rather than a precise forecast.

The more important question is what LVT replaces. Council tax in its current form is one of the most regressive taxes in the UK system — assessed on 1991 property values, it charges owners of modest homes in low-value areas a higher effective rate than owners of multi-million pound properties. Business rates distort commercial property markets in ways that disadvantage high streets relative to out-of-town and online retail. Both are candidates for replacement by a properly designed LVT, producing a revenue-neutral reform that taxes land more rationally while removing two taxes whose distortionary effects are well-documented.

4. Corporation Tax — Closing the Architecture, Not Just Raising the Rate

4.1 The Current Position

UK corporation tax raised £85 billion in 2023–24 at a headline rate of 25%.² That headline rate is among the higher rates in the OECD for mid-sized economies. The effective rate paid by the largest multinationals — particularly those in the technology and financial sectors — is substantially lower, through mechanisms the Tax Myth pillar documents in detail: transfer pricing, intellectual property holding structures in low-tax jurisdictions, full deductibility of AI capital expenditure, and the OECD's still-incomplete reform agenda.

The HMRC tax gap for corporation tax is estimated at approximately £9–10 billion annually³ — the difference between what is owed under current law and what is collected. This figure excludes legal avoidance, capturing only evasion and error. The legal avoidance number is larger and structurally embedded in how multinationals are organised.

4.2 The OECD Framework — What It Does and Doesn't Solve

The OECD's two-pillar agreement of 2021 is the most significant multilateral corporation tax reform in decades. The UK has implemented Pillar 2 — a 15% global minimum tax on large multinationals' profits, wherever booked.⁴ Pillar 1 — which would reallocate taxing rights so that companies pay some tax where their customers are, not just where they book profits — has stalled in implementation.

Pillar 2 is meaningful but limited. A 15% floor is a floor, not a target. The UK's headline rate is 25%. If a US technology company books its UK-derived profits in Ireland at 12.5%, Pillar 2 triggers a top-up charge — in principle. In practice, the US GILTI (Global Intangible Low-Taxed Income) regime operates as an alternative minimum that competes with Pillar 2, and the interaction between the two creates complexity that has already spawned significant litigation. The revenue from Pillar 2 for the UK is estimated at approximately £2 billion annually initially — meaningful, but modest relative to the scale of the underlying problem.

4.3 Unitary Taxation — The Structurally Correct Solution

The underlying problem with the current corporation tax system is architectural: it treats each subsidiary of a multinational as a separate entity for tax purposes, which allows multinationals to structure profits toward whichever subsidiary is in the most favourable jurisdiction. Transfer pricing rules are supposed to prevent this, but they are contested, expensive to enforce, and routinely gamed through IP licensing arrangements.

Unitary taxation is the structurally correct alternative. Rather than taxing each subsidiary on its locally-reported profits, you tax the multinational as a single entity on its global profits, and apportion the UK's share based on where the economic activity actually occurs — measured by employment, sales, and assets in the UK. The multinational cannot shift the UK apportionment to Ireland by booking sales through a Dublin subsidiary, because the apportionment is determined by where the customers, workers, and physical activity are — not where the profits are reported.

Unitary taxation cannot be implemented unilaterally without some international coordination, but it does not require universal agreement. A coalition of major economies implementing a common formula would cover the majority of global corporate activity and make evasion of the system significantly harder. The EU has proposed a version of this (BEFIT — Business in Europe: Framework for Income Taxation).⁵ It is not an untested idea. It is politically difficult rather than technically infeasible.

4.4 The Digital and Data Economy

The UK Digital Services Tax taxes large technology platforms at 2% of UK revenues from search, social media, and online marketplaces. It was designed as a provisional measure, pending the Pillar 1 agreement that has not materialised. Whether 2% is the right rate, and whether the current base captures the full scope of value extraction from UK users, is an open question this project flags as requiring further analysis.

The deeper question — which connects to the AI pillar — is whether there is a principled basis for taxing data extraction as a distinct economic activity. The large AI models that are reshaping the UK economy were trained on data generated by UK citizens, UK businesses, and UK public institutions. That data had value. The companies that extracted and commercialised it paid nothing for the extraction. This is not a novel form of market failure — it is the same logic that underlies carbon pricing (polluters should pay for the externality their activity imposes) applied to data (extractors should pay for the commons they are mining).

A data levy or data commons contribution — charged on companies above a certain scale that extract and commercialise data generated by UK users — is conceptually sound. The practical design challenges are significant: how to value data extraction, how to prevent double-counting with the Digital Services Tax, how to avoid capturing legitimate data uses alongside extractive ones. This is an area where the Gaps Register should record an open question rather than a resolved answer.

5. Carbon Pricing and the Border Adjustment

5.1 Carbon Pricing as Revenue and Correction

The UK's Emissions Trading Scheme — the domestic successor to the EU ETS post-Brexit — puts a price on carbon emissions from covered sectors (power generation, heavy industry, aviation). Businesses must hold permits for each tonne of CO₂ they emit. The permits can be traded, and the government auctions a portion of them annually, generating revenue.

Carbon pricing is the cleanest example of an instrument that both raises revenue and corrects a market failure. Carbon-intensive activities impose costs — through climate damage — that are not reflected in market prices. Making those activities pay for their carbon through the ETS internalises the cost, reduces the volume of carbon-intensive activity, and raises revenue from the reduction. Revenue raised from the current UK ETS is in the range of £2–3 billion annually, a figure that is expected to grow as the scheme expands and the carbon price rises.⁶

The honest observation about incidence: carbon pricing costs are passed through to consumers in higher energy and product prices. This is regressive in its direct effect — lower-income households spend a higher proportion of their income on energy. The standard design response is revenue recycling: use the carbon pricing revenue to fund a per-capita dividend or reduce other regressive taxes. The UK has used ETS revenue for general spending rather than explicit recycling. This is a design choice worth revisiting.

5.2 The Carbon Border Adjustment Mechanism

The EU has introduced a Carbon Border Adjustment Mechanism — effectively a carbon tariff on imports from countries without equivalent carbon pricing. The UK is implementing its own version from 2027. This is the intellectually defensible version of the "targeted tariff on certain industries" that trade policy sometimes proposes.

The CBAM is not protectionism. It is pricing-in an externality that the exporter has avoided. If a UK steel producer pays £75 per tonne of carbon through the ETS, and a competitor in a country with no carbon price produces the same steel at lower cost by emitting freely, the UK producer is at a competitive disadvantage — not because they are less efficient, but because their competitor is offloading costs onto the global climate. The CBAM charges the competitor's product at the border for the carbon content it embodies.

The revenue from CBAM accrues to the government. The incentive for trading partners is to introduce their own carbon pricing — which eliminates their CBAM exposure. The mechanism therefore functions both as a revenue instrument and as a lever for international climate policy coordination. It is one of the few cases in trade policy where tariff-like instruments serve a genuinely public purpose beyond revenue collection.

6. Sector-Specific Levies — When They Are and Are Not Justified

6.1 The Principle

A sector-specific levy is justified when one of three conditions holds:

The sector creates externalities it does not pay for. The carbon in fossil fuel production, the systemic risk in financial services, the environmental damage in certain extractive industries. These costs are real, they fall on others, and the sector's prices do not reflect them. A levy that prices the externality corrects a market failure. The revenue is a by-product of doing the right thing.

The sector benefits from an implicit public subsidy. Financial services is the clearest example. Large banks operate with an implicit government guarantee — the expectation, demonstrated in 2008, that the state will not allow systemically important institutions to fail. That guarantee is a subsidy, worth tens of billions annually, for which the sector currently pays nothing. A levy that prices that guarantee is not an additional tax on the sector — it is charging for a service the public provides.

The sector generates genuine windfall gains from events outside its control. When energy companies generate extraordinary profits because of a geopolitical supply crisis rather than their own investment or efficiency, a proportion of those unearned gains can be captured without deterring the investment that normal returns are meant to incentivise. The test for legitimacy is whether the gain was genuinely unearned and genuinely temporary. A permanent levy on a sector that has merely generated ordinary profits fails this test and deters investment. A time-limited windfall charge on extraordinary gains that required no additional effort passes it.

6.2 The Financial Transactions Tax

The UK already operates a financial transactions tax on share purchases — Stamp Duty Reserve Tax at 0.5%. It raises approximately £3 billion annually. This is proof of principle that a broader financial transactions tax is feasible at modest rates.

Extending the FTT to cover derivatives and fixed-income instruments — at very low rates (0.01–0.1% depending on instrument type) — would substantially broaden the base. The design challenge is that derivatives markets are highly sensitive to transaction costs, and a poorly designed FTT can drive activity to other jurisdictions. The evidence from European FTT experiments is mixed, with France and Italy experiencing volume migration on equity derivatives. A UK FTT that is coordinated with other major financial centres is more viable than a unilateral one; a unilateral one limited to instruments that cannot easily be traded elsewhere is more viable than a comprehensive one.

The honest position: an extension of the existing stamp duty principle to a broader set of financial instruments is worth pursuing at modest rates and with careful design. A comprehensive FTT at rates that would transform financial sector economics is a different, and riskier, proposal.

6.3 The Banking Levy and the Implicit Guarantee

The UK bank levy — introduced in 2011 — charges a proportion of a bank's balance sheet above a threshold. It raises approximately £1.5–2 billion annually. It was introduced explicitly in recognition that large banks benefit from an implicit state guarantee that their depositors and creditors will be protected in the event of failure.

The economic case for the levy is strong and remains valid. The 2008 financial crisis demonstrated that the guarantee is real — the UK government committed over £1 trillion in guarantees, loans, and capital injections to stabilise the financial system. That guarantee continues. It reduces the funding costs of large banks — they can borrow more cheaply than their underlying risk profile would justify, because lenders assume the state backstop is in place. The difference between their actual funding costs and what they would pay without the implicit guarantee is a subsidy. The bank levy is the charge for that subsidy.

Whether the current rate prices the guarantee at its full value is an open question. The guarantee is worth more in a financial system that is larger, more leveraged, and more interconnected. The levy has been reduced several times since its introduction. Restoring it to a level that reflects the current value of the guarantee — rather than a level negotiated down by the lobbying power of its payers — is the correct adjustment.

7. Trade Tariffs — The Honest Assessment

7.1 Tariffs as Revenue: What Trump's Policy Illustrates

The United States under Trump's 2025 tariff programme has demonstrated, at scale, what happens when tariffs are used primarily as a revenue and political instrument rather than a targeted trade policy tool. The empirical evidence on who bears the cost is clear: tariff costs are passed through to consumers in higher prices. The Federal Reserve Bank of New York and multiple peer-reviewed studies of the 2018–2019 US tariff rounds⁷ found that the full cost of tariffs was passed through to US consumers, with minimal evidence that the burden fell on foreign exporters.

This is the consumer incidence point. A tariff is nominally paid by the importer. But the importer passes it forward in higher prices. The effective tax falls on the final consumer — and because tariffed goods (electronics, clothing, household goods, food) constitute a higher proportion of lower-income households' budgets, the distributional impact is regressive.

Tariffs also invite retaliation. A tariff on one sector triggers a corresponding tariff on another from trading partners. The revenue from one tariff is offset by the cost to exporters of retaliation. The net fiscal position is ambiguous; the net economic position is typically negative.

7.2 Where Targeted Tariffs Are Legitimate

Four circumstances justify tariff-like instruments and none of them are primarily about revenue generation.

Anti-dumping. A foreign producer selling below cost to capture market share destroys domestic industry and creates long-term strategic vulnerability. WTO rules permit anti-dumping tariffs on demonstration of dumping. This is legitimate, time-limited, and targeted.

Carbon border adjustment. As described in Section 5. This is not protectionism — it is pricing an externality. It generates revenue as a consequence of correcting a market failure, not as its primary purpose.

National security. Semiconductor supply chains, medicines, critical minerals, and strategically significant manufacturing capacity. The economic cost of a national security tariff is accepted as an insurance premium against supply disruption. This is a legitimate use of trade policy with a clear and limited scope.

Infant industry protection. Temporarily protecting a domestic industry while it achieves competitive scale has a theoretical justification — and a consistently poor empirical record, because temporary protection is politically impossible to remove once vested interests form around it. The honest position: the argument is coherent in theory and has almost never worked in practice. It should be treated with significant scepticism.

7.3 What the UK Specifically Cannot Afford to Get Wrong

The UK imports approximately 30% of GDP in goods and services. It is one of the most trade-exposed major economies in the world. Tariffs on imports — particularly at scale — translate directly to higher consumer prices in an economy that already has elevated inflation concerns, significant import dependency in food and manufactured goods, and a current account deficit that reflects the importance of international capital flows.

The post-Brexit trade architecture has already reduced the UK's tariff-free access to its largest trading partner. Further unilateral tariff increases, outside the narrow legitimate uses above, would compound rather than address the UK's structural economic vulnerabilities. Tariffs are a limited and largely inappropriate instrument for a revenue architecture designed to fund the services the Generational Reset argues are required.

8. The Portfolio — How the Instruments Fit Together

No single instrument in this document is sufficient on its own. Each has strengths and weaknesses, different timing profiles, different incidence characteristics, and different political economies. Together they constitute a coherent fiscal architecture for an economy in which labour income is shrinking and asset wealth — in land, corporations, and financial instruments — is growing.

9. The Timing Question — Sequencing the Portfolio

9.1 Instruments Available Immediately

The financial transactions tax extension, the bank levy restoration, and a reinforced Digital Services Tax can all generate revenue within a parliamentary term. None require the multi-year infrastructure investment that LVT demands or the 15-year transition that the inheritance tax reform involves. Together they represent a meaningful down-payment on the revenue architecture while the longer-term instruments are built.

Carbon pricing revenue is already flowing and will grow as the UK ETS matures and the CBAM becomes operational. This is the easiest revenue to expand: tightening the cap in the ETS increases the carbon price and increases revenue, while also accelerating decarbonisation. Revenue recycling — using ETS and CBAM revenue to reduce the regressive impact of higher energy prices on lower-income households — should be built into the design from the outset.

9.2 The Medium-Term Build

LVT requires investment in valuation infrastructure before it can yield at scale. The Valuation Office Agency would need significant expansion, the legal framework for title-registered development restrictions would need to be established, and the integration with ELMS would need to be operational. A realistic timeline for LVT to be contributing meaningfully to the revenue architecture is five to ten years from a decision to implement.

Corporation tax reform — specifically the move toward unitary taxation — requires the assembly of an international coalition willing to adopt a common formula. This is a diplomatic project as much as a legislative one. The EU's BEFIT framework is the most likely vehicle. UK engagement with that framework, even as a non-EU member, through bilateral agreements or parallel legislation, is the practical path.

9.3 The Long-Term Architecture

The inheritance tax transition — the centrepiece of the whole architecture — is a 15–25 year project. The two-stage implementation path described in the Economic Renewal pillar means the full 95% rate and the corresponding income tax abolition are the final destination of a journey that begins with the Stage 1 reform. The revenue portfolio described in this document is not an alternative to the inheritance tax reform. It is what makes the transition period fiscally viable, by contributing meaningful revenue during the decades before inheritance tax receipts reach the scale required to replace income tax receipts.

The long-run architecture, when the transition is complete, is a fiscal system that taxes:

• Wealth at the point of intergenerational transfer (inheritance tax)
• The value of land — the most fundamental form of unearned wealth (LVT)
• Carbon and other externalities — making the things that damage the commons pay for their damage
• Financial activity at modest rates — funding the implicit public backstop the financial sector relies on
• Corporate profits where the economic activity occurs — not where the accountants book it

The things no longer taxed, or taxed at dramatically lower rates: labour income, productive investment, genuine enterprise. The architecture is coherent. The direction of travel is clear. The instruments reinforce each other rather than competing. And the burden of funding public services falls on wealth, land, externalities, and financial activity rather than on the workers and earners whose income is already under structural pressure from the forces this project describes.

10. The Steel Man — The Case for Simplicity

The steel man is partly right. Complexity is genuinely a problem in tax design. Every boundary creates an arbitrage opportunity. Every exemption becomes a lobbying target. The principle of broad bases and low rates has real force.

The response: the instruments proposed here are not complex for complexity's sake. Each addresses a specific market failure or closes a specific avoidance route that the current system has demonstrably failed to capture. LVT is structurally simpler than the council tax and business rates it replaces — a single annual charge on a registered asset, with fewer reliefs and fewer valuation disputes than the systems it supersedes. Carbon pricing through an ETS is a market mechanism that operates with minimal administrative overhead once the cap and the permit auction are established. A modest FTT extension to the existing stamp duty framework adds administrative complexity at the margin, not structurally.

The goal is not more instruments. The goal is the right instruments, designed to tax things that should have been taxed all along and to close routes that have allowed those things to escape. That is a different argument from complexity for its own sake, and it deserves to be treated as such.

12. Proposals for Change

The following proposals are sequenced by implementation horizon and dependency.

Immediate (Years 1–3)

• P1 Restore the bank levy to a rate that reflects the current value of the implicit state guarantee, using HM Treasury modelling of what the guarantee would cost if priced as a commercial insurance product.⁸

• Extend Stamp Duty Reserve Tax to cover exchange-traded derivatives at 0.01%, consistent with the existing principle and calibrated not to drive activity offshore. Review annually.

• P2 Move the Digital Services Tax from a provisional 2% revenue charge to a permanent instrument at a rate informed by an independent assessment of value extracted from UK user data, pending the outcome of the Pillar 1 stalled negotiations.

• P3 Use ETS and CBAM revenue explicitly for a per-capita energy cost dividend to lower-income households, making the carbon pricing revenue recycling visible and politically accountable.

Medium Term (Years 3–10)

• P4 Invest in the Valuation Office Agency to build the land valuation infrastructure required for LVT, beginning with urban commercial land and large undeveloped plots where the value gap between use and development potential is largest and least contested.

• P4 Introduce a Land Value Tax on a phased basis — urban commercial and undeveloped land first — with a legally enforceable development restriction as the qualifying condition for reduced agricultural and conservation rates.

• Integrate LVT with the Environmental Land Management Scheme so that ELMS payments offset LVT liability for land in genuine productive agricultural or environmental stewardship use.

• Legislate for the connected persons governance test for charitable land holdings — no individual or connected persons group may hold effective control as a condition of LVT charitable exemption, defined using the PSC framework from the Companies Act.

• P5 Engage actively with the EU's BEFIT framework for unitary corporation taxation, seeking bilateral alignment or parallel UK legislation that achieves the same apportionment principle.

Long Term (Years 10+)

• P6 As the LVT infrastructure matures, replace council tax and business rates with a comprehensive LVT — simpler, broader-based, and more rationally related to actual land value than either instrument it replaces.

• P5 Advance the unitary taxation agenda through international coalition-building, positioning the UK as the advocate for this reform in G7 and OECD forums.

• As inheritance tax receipts grow and the income tax transition proceeds, recalibrate the revenue portfolio — reducing the weight on instruments with higher incidence on ordinary consumers and increasing the weight on instruments that fall on wealth, land, and unearned returns.

Document status: Living — the data extraction tax, LVT valuation methodology, and unitary corporation tax sections contain open questions registered in the Gaps Register pending further analysis. Version 1.0, June 2026.

The Generational Reset | S3_05: The Revenue Architecture | For public discussion. Not affiliated with any political party. | generationalreset.org