explainerTaxationPublic FinanceBox 3Wealth

What should Box 3 actually tax?

Annual taxation of paper gains is precise for listed portfolios and easier to prefill. Yet dividing assets between annual accrual and realization creates a permanent tax boundary across investments, wrappers, and legal forms. Box 3 should generally tax cash returns when received and capital appreciation when sold or otherwise realized, while Parliament treats the transition from today's stopgap as a separate fiscal and administrative problem.