A high-net-worth individual has many different meanings and standards depending on who you ask and where you are.
In general, a high-net-worth individual is a person with liquid assets at or above a relevant threshold. However, the standard differs between jurisdictions. For example, the standard for HNWI will be different in West Virginia versus Switzerland.
As global wealth increases and more people enter these categories, these thresholds change. For example, the standard for what made an individual an Ultra-High-Net-Worth Individual used to be $30 million of liquid net assets, which has since increased to $50 million of liquid net assets.
As a general rule of thumb, the following thresholds apply to these categories:
- High-Net-Worth Individuals (HNWI). Individuals with $1 million or more in liquid net assets.
- Very-High-Net-Worth Individuals (VHNWI). Individuals with $5 million or more in liquid net assets.
- Ultra-High-Net-Worth Individuals (UHNWI). Individuals with more than $30 million in liquid net assets. This threshold has since increased to $100 million of liquid net assets.
According to the 2022 Global Wealth Report prepared by Credit Suisse, the United States ranks the highest with the most ultra-high-net-worth individuals.1 In the United States, roughly 105,000 individuals have a net worth between $50 and $100 million, and roughly 35,000 individuals have a net worth between $100 and $500 million.2
Standards Used by the Internal Revenue Service (IRS)
The IRS established a Global High Wealth Industry Group (GHW Group) as part of its Large Business and International (LB&I) Division.
The GHW Group initiative is to focus audit efforts on high-net-worth individuals and large businesses with an international footprint. The focus on large companies is not exclusive to corporations. The GHW Group will also focus on large partnerships, tiered partnerships, trusts, foundations, and tax-exempt organizations.
The GHW Group considers an individual to be high-net-worth if their annual income is $10 million or more. A large business entity, trust, foundation, or other tax-exempt organization falls within the GHW Group’s radar if total assets are $250 million or more.
Additional Information
Taxpayers can visit the IRS website for more information about the IRS’ Large Business and International active campaigns and audit risks for high-net-worth taxpayers and companies.