The Wealth Delta Tax: Constitutional Governance Operational Appendix

Keywords

Wealth Delta Tax, constitutional governance, institutional implementation, Governing Council, taxpayer chamber, voting systems, Sovereign Wealth Fund governance, reserve management, institutional safeguards, Route D auction, auction governance, appointment mechanisms, fiscal administration

Version: 1.02  |  Date: 20 Sep 2026  |  Word count: 19,259 (excl. front matter)

Author Disclosure

Portions of the drafting, editing, literature organisation, and structural review of this paper were assisted by publicly available large language models, including Anthropic’s Claude and OpenAI’s ChatGPT. These tools were used as aids to the author’s research and writing process; the substantive arguments, analysis, interpretations, and conclusions are the author’s own.

This work received no external funding, sponsorship, or other financial support. The author is solely responsible for the content of the paper and for any errors that remain.

Revision History

Revision	Date	Details
0.01	28 July 2026	First Draft
1.00	15 August 2026	Published to website
1.01	29 August 2026	§G opening restructured to name three Route D auction pathways and direct readers to pathway-specific subsections; §G.1 two paragraphs added stating taxpayer non-notification rule and lock-point at sealed estimate submission; §G.3 replaced in full to cover corrective under-declaration, corrective over-declaration, and no-bid outcomes with distinct treatment for each; §G.4 paragraph added covering over-declaration and no-bid basis-reset documentation; §G.5 sentence added confirming flag direction not disclosed at flag stage; §G.7 new section added specifying voluntary hard-reset auction mechanics and refund treatment; §G.8 new section added specifying inheritance auction mechanics and confirmation that corrective no-refund rule does not import into inheritance pathway
1.02	20 September 2026	Crosslinks added: §E.3 extended with three-instrument SWF overview pointing to (VAL §13) sovereign liquidity facility; §H.5 extended with pointer to (CORP.A §B.2.8) \(\tau_h\) ramp parameters and joint calibration requirement

A. The Chambers in Full

A.1 The Taxpayer Chamber (TP)

A.1.1 Eligibility and the Self-Evidencing Entry Rule

TP membership is a byproduct of WDT filing. Any individual who files above the threshold is, in the same transaction, a TP member; no separate registration exists or is needed. Eligibility is confirmed at the close of each assessment window: the window is when net worth is measured, the threshold crossing is determined, and TP standing is validated or withdrawn.

Two boundaries. Voluntary participants below the threshold are not TP members; their inclusion would dilute the chamber’s standing without adding the lever-holding property (GOV §3) requires. A member currently tax-neutral within their lifetime contribution envelope remains a TP member provided they are above the threshold and filing; tax-neutrality is a position within the mechanism, not a ground for exclusion.

A.1.2 Intra-Cycle Membership Changes and the Assessment Window as Validation Moment

Membership changes take effect at assessment window boundaries, never mid-cycle. A person does not become a TP member when their wealth crosses the threshold mid-year but when that crossing is confirmed by filing at the close of their assessment window. A member whose wealth falls below threshold does not lose standing until the close of the next window in which below-threshold status is confirmed.

A Tier 2 vote draws its TP membership from the validated population as of the most recently closed assessment window. A member crossing below the threshold during the voting window retains standing for that vote; a person crossing above does not acquire standing until their next window closes. Neither outcome requires a mid-vote judgment; the validation moment has already passed.

FS office supersedes TP membership immediately. A person who takes qualifying FS office mid-cycle loses TP standing at the moment of appointment; their share redistributes to remaining TP members automatically. FS office displaces TP membership; TP membership does not displace FS office. No person may simultaneously hold standing in more than one chamber. A DR lottery selectee who is also a TP member is treated as holding TP standing by priority, since TP membership is a structural fact of WDT eligibility rather than a discretionary choice.

A.1.3 Internal Vote Share Arithmetic

Each TP member holds an equal share of the chamber’s total external vote. If TP holds twenty-five percent of total Governing Council vote and there are N confirmed members, each member holds 0.25/N. On entry the total redistributes: each existing member’s share decreases by 0.25/(N+1) and the new member receives 0.25/(N+1). On departure the total redistributes upward: each remaining member receives an additional 0.25/(N−1) − 0.25/N. Wealth concentration within TP confers no additional internal weight. TP’s external share changes only through the rebalancing mechanism in (GOV §5.3), which operates at the chamber level and is not triggered by membership changes.

A.1.4 Proposal Initiation and the Internal Quorum

Any TP member may initiate a draft proposal through the Administrator’s internal communications system. Submission creates no obligation or cost for the chamber; the draft becomes visible to all current TP members. It becomes the chamber’s proposal — and exposes the chamber to the rebalancing cost — only once it clears the internal quorum: a yay majority among those who actually vote, with non-votes excluded from the denominator. The internal vote is recorded but not published externally until the quorum is cleared. Once cleared, the proposal enters the Governing Council queue as the full chamber’s proposal regardless of margin.

There is no minimum number of members required to initiate a draft, but a proposal with thin internal support will not advance. A member who repeatedly initiates drafts that fail the quorum pays no structural cost; the cost is reputational within the chamber.

A.1.5 TP’s Internal Factionalism: What the Architecture Leaves Alone

TP is not homogeneous. Members range from founders with large illiquid single-company positions to diversified listed-equity holders to those near the threshold. These populations have different preferences on assessment window length, Route D trigger calibration, SWF risk tolerance, and rate design. The architecture does not regulate TP’s internal political life or require any faction to prevail. The one constraint: a proposal must clear the internal quorum before the chamber commits to it. Beyond that, coalitions and informal blocs may form freely. TP’s factionalism limits its capacity to act as a unified bloc, which is the architecture’s structural response to TP’s collective wealth concentration: not restricting what TP can propose, but requiring majority support rather than the preference of a single initiator.

A.2 The Fiscal Sovereign Chamber (FS)

A.2.1 Qualifying Offices: Criteria, Not a List

Which UK statutory posts constitute FS-qualifying offices is assigned to JUR or to the Phase One implementation paper. What this paper specifies is the criteria, so that any jurisdiction can apply them without the criteria becoming a political question.

An office qualifies for FS membership if it satisfies all three of the following. First, it is a constitutional or statutory office whose tenure is independent of the ordinary electoral cycle: the officeholder is not directly elected and does not serve at the legislature’s pleasure on a short political cycle. Second, it carries direct institutional responsibility for tax collection, public expenditure, or monetary stability. Third, it is held by a named individual, so that FS membership is attributable to a specific person who bears accountability through their existing constitutional structures.

These criteria exclude two failure modes. Parliamentary overflow: elected legislators holding offices that nominally satisfy the fiscal criterion would make FS effectively a parliamentary chamber within the Governing Council. Technocratic sweep: including every civil servant with some fiscal remit would make FS membership unattributable and its accountability opaque. In the UK context the criteria point naturally to a small set of senior offices (the Chancellor of the Exchequer, the Governor of the Bank of England, and equivalent-level statutory posts), but confirming that list is JUR’s work.

A.2.2 Entry and Exit Mechanics

Entry and exit are tied directly to tenure in the qualifying office. A person becomes an FS member the moment they assume qualifying office; they cease to be one the moment they leave it. No separate membership process or certification exists. The Administrator verifies FS standing against the constitutional office register for the relevant jurisdiction, which is the authoritative source.

Unlike TP, whose membership changes are buffered by the assessment window, FS membership changes take effect immediately. A Tier 2 vote that opens while one officeholder holds FS standing and closes after their successor takes the same office counts the successor’s vote. The office, not the person, is the unit of FS membership.

FS office supersedes both TP and DR standing. A person who assumes qualifying FS office while holding TP membership loses TP standing immediately. A person seated in DR who assumes qualifying FS office loses their DR seat immediately; this is treated as a seat vacancy rather than a seat-burn, so it does not trigger Tier 2 review.

A.2.3 The Chairman: Role and Selection

FS selects a chairman from among its own members. The role is purely procedural: managing FS’s internal agenda, setting the speaking order for internal deliberation, and signing official communications to the Administrator. The chairman holds no additional vote, no tie-breaking power, and no authority to bind the chamber without an internal vote. The most natural holder in the UK jurisdiction is the Chancellor of the Exchequer, but selection is by FS’s own internal vote. The chairman’s term corresponds to their tenure in the underlying qualifying office; FS may change its chairman at any point by internal vote.

A.2.4 Internal Organisation and Dissent

FS operates within the existing governmental culture and accountability structures of its jurisdiction. The WDT specifies the required outcome (a chamber proposal commanding majority support among FS members) but not the procedure. Cabinet-style collective agreement, formal internal vote, and delegated authority to the chairman are all compatible; the Phase One implementation paper confirms the applicable procedure.

Whatever the procedure, three properties must hold: the proposal must represent majority support rather than the preference of a single member; the chairman holds no additional vote weight in any formal determination; and FS members who dissent from a proposal that clears the internal process have no WDT mechanism to formally register that dissent at the Governing Council level. Dissenting members retain all other options, including petitioning DR members directly.

A.3 The Dividend Recipient Chamber (DR)

A.3.1 The Lottery Mechanism: Birth-Month Stagger and Draw Count

DR membership is filled by monthly lottery. Each month, a draw is conducted among individuals born in that calendar month who are above the minimum age for service (a Phase One calibration parameter, constrained to exceed the jurisdiction’s minimum age for legal contractual capacity) and who have not permanently forfeited eligibility through a seat-burn. Prior DR service does not exclude a person from reselection. Selection is random within the birth-month cohort; no weighting by wealth, employment, education, or prior service applies. The birth-month stagger ensures DR never experiences a cliff-edge where a large fraction of membership turns over simultaneously.

The draw count (the number of individuals drawn from each monthly cohort) is the architecture’s primary scaling parameter for DR’s seated membership. It must be set at a level sufficient to produce a seated DR capable of meaningful watchdog functions, accounting for the volunteer rate. The draw count is also the input the constituency dissolution mechanism responds to (GOV.B §A.3.3). Selectees who decline to serve face no consequence and are not publicly identified; the only visible figure is the aggregate volunteer rate.

A.3.2 The Volunteer Rate: Definition, Tracking, and Publication

The volunteer rate is the proportion of selectees in any given cohort who accept service and take up their seat within the service-acceptance window. The service-acceptance window is a Phase One calibration parameter, constrained to be long enough for adequate deliberation and short enough to avoid extended vacancies.

The volunteer rate is published continuously, updated each month as each cohort’s acceptance window closes. It is published as a rolling figure (the most recent cohort’s rate), a trailing average (window length a Phase One calibration parameter), and the full historical series. The Administrator publishes all three as mandatory outputs with no discretion over timing or characterisation. The volunteer rate is a legitimacy signal, not itself a governance trigger; what it triggers, once it falls below the floor for a sustained period, is the constituency dissolution mechanism in (GOV.B §A.3.3).

A.3.3 The Constituency Dissolution Mechanism: Full Trigger Logic

The constituency dissolution mechanism responds automatically to the volunteer rate. Its logic has three components: a trigger floor, a trigger window, and a draw-count step.

All three values are Phase One calibration parameters protected by the enumerated structural clause list in (GOV §5.2); changing them requires a Tier 2 structural vote with the full rebalancing cost. The mechanism must retain its shape regardless of the values set: automatic response to the volunteer rate, asymmetric expansion and decay windows, no DR self-determination of its own floor.

Expansion begins when the volunteer rate has remained below the floor for the full trigger window. The draw count for the following month’s cohort increases by the step size. If the rate remains below the floor, the draw count increases by the same step each month until either the rate recovers or a draw-count ceiling is reached. The mechanism does not fire above the ceiling; a DR at ceiling that still cannot sustain its volunteer rate is a governance signal requiring Governing Council attention.

Decay begins when the volunteer rate has recovered above the recovery threshold (set above the trigger floor, so a rate that has returned exactly to the floor does not immediately trigger decay) and has remained above it for the full decay window. The decay window is deliberately longer than the trigger window: expansion responds faster than decay contracts. When decay begins, the draw count reduces by the step size per month until it reaches baseline.

DR cannot set any of these parameters. The floor, the windows, the step, and the ceiling are all set by Governing Council decision at Phase One and are moveable only by a TP or FS structural proposal at the full rebalancing cost.

A.3.4 DR Seated Membership: Scale, the Phase Two Problem, and What This Paper Settles

At Phase One, DR is a small deliberative body. The draw count is calibrated to produce a seated membership capable of watchdog deliberation (comparable to a Citizens’ Assembly) rather than a plebiscite mechanism. DR’s anti-collusion function does not require size parity with TP; it requires that capturing DR costs more than capturing TP and FS combined. A well-selected, rapidly rotating, diffuse small body satisfies that condition more reliably than a large one, because large bodies develop informal caucus structures that reduce effective diffuseness even as formal membership grows.

The Phase Two scale problem is unresolved here. If Phase Two brings the WDT threshold down to levels generating a TP chamber of millions, the question of whether DR should scale to match becomes significant. A DR of hundreds watching over a TP of millions has a different anti-collusion character than Phase One’s rough proportionality implies. Whether that difference is a problem and what the response is, is assigned to the Phase One implementation paper, which must address the Phase Two DR scale question before Phase Two parameters are set, because the answer affects the draw-count ceiling.

What this paper settles is the mechanism’s shape regardless of eventual scale: a lottery-selected body, the volunteer rate as the legitimacy signal, the constituency dissolution mechanism responding to that signal automatically, and a DR that cannot set its own parameters. Whether DR’s seated membership at Phase Two sits in the hundreds, thousands, or higher is a Governing Council decision informed by Phase One evidence.

A.3.5 Seat-Burn: Mechanics and Share Rebalancing Arithmetic

A DR member who burns their seat exits the chamber immediately, permanently, and without reversal through a single action in the Administrator’s system; no counter-signature, approval, or confirmation step is required. The triggering of Tier 2 review and the seat exit occur as a single transaction: the member cannot burn their seat and then remain to vote in the resulting Tier 2 session.

DR’s total vote share is fixed at fifty percent and does not change as a result of a seat-burn. The exiting member’s share is redistributed proportionally across all remaining DR members at the moment of exit: if N members held equal shares of fifty percent before the burn, each remaining member’s share moves from 50/N to 50/(N−1). This arithmetic is computed and applied by the Administrator’s system automatically.

The burn cannot be reversed even if the triggering member later judges they acted prematurely. The remaining DR members participate in the Tier 2 vote with their automatically adjusted shares. The irreversibility is the mechanism by which frivolous escalation is self-limiting, as developed in (GOV §5.3). A seat vacated by automatic revocation following a missed Tier 2 vote is filled by the same procedure; the filling mechanism is identical regardless of how the vacancy arose.

A.3.6 The DR Forums: Access, Verification, and the Administrator’s Role

DR members have access to two forums. The first is the internal member forum: posting rights are restricted to current seated DR members, verified continuously against the lottery selection records the Administrator maintains. A member who burns their seat loses posting rights immediately. Any person may read the forum’s contents; only current members may post. The Administrator’s role is access verification and transmission only; it holds no discretion over content and may not remove, delay, or characterise posts.

The second is a fully public forum, open to any person without restriction or verification. It functions as the channel through which external expertise, civil society commentary, and public input can reach DR members, supplementing the governance transparency framework in (GOV §6.4). DR members may read and consider submissions; they are not required to respond or to treat any submission as carrying procedural weight.

Neither forum is mandatory. The only communications carrying constitutional validity are those conducted through the Administrator’s internal system for casting votes or submitting classification veto labels; forum activity has no procedural effect regardless of content. The Administrator does not moderate, curate, or characterise either forum. Any change to the forum’s access rules is a logged event in the permanent record.

B. The Executive Bodies in Full

This section specifies the institutional requirements each executive body must satisfy: appointment conditions, independence properties, and removal and tenure principles. It does not specify what kind of organisation fills each role, how many staff it carries, or how it is funded in detail. Those questions can only be answered with access to the actual operational environment. What this section settles is the constraint space any valid implementation must satisfy.

B.1 The Valuation Bodies (VB-1, VB-2, VB-3)

B.1.1 What the Valuation Bodies Must Be

The three Valuation Bodies will in practice be a mix of institutional forms — publicly funded statutory bodies, privately funded professional organisations under statutory mandate — with geographic distribution across the relevant jurisdiction a requirement rather than an incidental feature, since the asset classes assessed (private equity, real property, non-fungible assets) are not uniformly distributed and local expertise matters. Institutional form, funding model, staffing, and geographic footprint are Phase One implementation questions.

What is not a Phase One question is the set of institutional requirements any valid body must satisfy. These are derived from the functional properties (GOV §6.1) depends on: three bodies independent of each other, independent of the taxpayer population they assess, and structured so that no single governance moment can reshape all three simultaneously.

B.1.2 Appointment: Competitive Tender and Dual-Threshold Confirmation

Each Valuation Body is appointed through a competitive tender managed by the Administrator, which publishes eligibility criteria, receives applications, and forwards the shortlist to the Governing Council. Confirmation requires the standard dual-threshold vote: a yay majority among those who vote and nays staying below DR’s vote share. No single chamber acting alone can confirm an appointment.

The eligibility criteria must satisfy three conditions. First, the applying organisation must be institutionally independent of any current TP member’s primary business interests. Second, it must hold demonstrated professional competence across the asset classes it will value; self-certification is insufficient and the tender must include an independent technical assessment. Third, it must have no current or recent institutional relationship with the other two Valuation Bodies: no shared leadership, no shared parent, no shared funding stream. Bodies that are informally coordinated before case assignment will converge on shared positions rather than produce independent estimates.

There is no renewal. A Valuation Body that completes its term is ineligible to reapply for the same position for a period equal to its original term length.

B.1.3 Staggered Terms and the Anti-Simultaneous-Reshaping Requirement

The terms of the three Valuation Bodies are staggered so that no single appointment round can reshape all three simultaneously. At any moment, at least one body should be in the early portion of its term, at least one in the middle, and at least one approaching the end. The specific term length is a Phase One calibration parameter subject to two constraints: long enough that a body develops institutional expertise and an independent professional culture before its term ends; short enough that systematic drift in any one body’s outputs becomes visible in the published corroboration statistics while there is still time to act within the term.

The stagger is a structural requirement protected through enumerated clause 8: any appointment arrangement resulting in simultaneous term expiry, or allowing a single appointment round to replace more than one body, violates this protection.

B.1.4 Hard Institutional Separation: What It Requires

Hard institutional separation means the following hold at all times: no shared staff at any level, including secondments and consultancy arrangements; no shared leadership, board membership, or governance overlap; no shared institutional parent exercising material direction over more than one body; no shared funding stream where the funder has discretion over how funds are distributed between bodies. Shared professional standards bodies (a statutory valuation code board of the kind described in VAL) are not a violation, since their function is methodology-setting rather than operational direction.

The Administrator verifies institutional separation as part of each tender confirmation. Any mid-term change in a Valuation Body’s structure that would produce a violation must be disclosed to the Administrator immediately; the disclosure is logged as a dated event. Whether the change triggers a removal process is a Governing Council decision under (GOV.B §B.1.5).

B.1.5 Removal

A Valuation Body may be removed mid-term by the same dual-threshold Governing Council vote that confirmed its appointment. Removal does not require a cause finding; a cause requirement would reintroduce exactly the discretionary judicial-style assessment the mechanism-shaped standard exists to avoid. The dual-threshold vote is itself the protection against arbitrary removal: DR’s unanimous opposition is independently sufficient to block a removal lacking cross-chamber support.

A cooling-off protection applies: a Valuation Body may not be removed within a minimum period of its appointment (a Phase One calibration parameter), preventing appointment-then-immediate-removal cycling. On removal, the vacancy is filled by a fresh competitive tender on the same terms. The replacement body’s term runs for the full term length from the date of appointment, not the remainder of the removed body’s term; this ensures the stagger does not collapse as a result of mid-term removals.

B.2 The Allocator

B.2.1 Appointment

Either FS or TP may propose a candidate for Allocator through the Administrator’s internal communications system. The proposal enters the T1 queue. All three chambers vote under the standard dual-threshold rule. The proposing chamber is recorded as the endorsing chamber for rebalancing purposes: if the appointed Allocator is subsequently removed on T2, the rebalancing cost falls on the endorsing chamber.

Appointment criteria are not specified as a checklist because the role requires judgment checklists cannot capture. The relevant qualities are relational standing with both proposing chambers and demonstrated capacity to synthesise competing perspectives into a coherent public argument. Prior service in government, the taxable population’s professional world, or relevant policy advisory roles are compatible with appointment but not prerequisites. Prior distance from the chambers is not a virtue. The chambers, voting at T1, are the mechanism for assessing whether a candidate has the standing and judgment the role requires. A chamber that proposes someone it expects to deliver a favourable recommendation will find that person challenged via T2, with the rebalancing cost falling on the proposing chamber if the challenge succeeds.

B.2.2 Tenure, Removal, and the Structural Accountability Mechanism

The Allocator serves without a term limit. Removal requires a T2 vote, triggered by any single DR seat-burn. All chambers participate under mandatory full-turnout rules. If the T2 vote succeeds, the rebalancing cost falls on the chamber that originally proposed the Allocator. If the T2 vote fails, no rebalancing cost falls on any chamber; the seat-burn is the only cost, falling on the DR member who triggered it.

The Allocator may resign at any point without procedural requirement, including between a seat-burn occurring and the resulting T2 vote completing. Where the Allocator resigns before T2 concludes, the process lapses; no vote is taken and no rebalancing cost falls on any chamber. The proposing chamber does not control the Allocator — it endorsed the candidate but holds no ongoing direction. The chamber will use informal influence to encourage resignation precisely because a successful T2 removal costs it rebalancing share while a quiet resignation costs nothing. The Allocator has a parallel incentive: resignation before T2 is better than losing a formal vote. Both incentives point the same direction. The drawn-out public T2 battle is the failure case; the mechanism is designed to make it rare.

Long tenure under this structure is a sign of performance rather than entrenchment. An Allocator who consistently produces reasoning DR finds credible and whose recommendations reflect honest synthesis will face seat-burn challenges that fail — because a failed T2 challenge strengthens the Allocator’s position and costs the challenging chamber nothing, while a successful challenge costs the proposing chamber rebalancing share. The Allocator has positive incentive to produce honest synthesis precisely because honest synthesis is the best defence against removal.

(GOV §6.2) names the Allocator as the most capture-vulnerable body in this architecture — a description of a structural feature, not a design flaw. The role must be embedded in both chambers’ epistemic worlds to perform the synthesis the Council needs. Inside connections to TP and FS are the mechanism through which the role functions.

B.2.3 Publication Requirements Before the Governing Council Votes

The Allocator’s recommendation must be published, with its full supporting reasoning, before the Governing Council opens a vote on allocation. The Administrator cannot open an allocation vote until the recommendation is in the permanent public record.

The publication requirement’s primary function is making synthesised inside knowledge available to DR. TP and FS hold private operational and fiscal knowledge that does not appear in the Administrator’s published outputs; the Allocator’s recommendation is the mechanism through which that knowledge enters the public record in a form DR can evaluate. A recommendation that contains only a proposed number, without making explicit what TP argued, what FS argued, and how the synthesis weighs those inputs, has failed to perform this function regardless of whether the number is correct.

The requirement therefore specifies not just that reasoning be published but that it address the substantive arguments each chamber made in the consultations leading to the recommendation. Where one chamber’s case was found unpersuasive, the recommendation must say why. Where the synthesis departs from what either chamber proposed, it must say what drove the departure. This makes the recommendation an auditable argument; DR’s vote on the allocation is a judgment on the argument.

If the Governing Council departs from the Allocator’s recommendation, the departure and the Council’s own reasoning must enter the permanent public record before the vote closes. This ensures the quality of the recommendation, and of any departure from it, are visible in the same record.

B.2.4 The Allocator as Public Figure

The Allocator may become publicly prominent over time. The annual recommendation, published in full before the Council votes, is inherently a public document. No formal constraint on the Allocator’s public speech exists or is appropriate.

The practical discipline on destabilising public conduct is the seat-burn threat. An Allocator whose public statements consistently diverge from their formal recommendations, or who conducts a public campaign for a particular allocation outcome outside the formal process, provides DR members with visible grounds for a seat-burn challenge. An Allocator who says one thing publicly and recommends another has created a legible inconsistency in the permanent record. An Allocator who judges that a seat-burn challenge is likely to succeed may resign before T2 completes, producing the same correction without the formal process. Prominent Allocators who maintain alignment between their public reasoning and their formal recommendations are an asset to the mechanism.

B.2.5 Adviser Corps as Structured TP Intelligence Source

The Allocator’s revised mandate requires embedded knowledge of TP’s epistemic world — the private information about investment conditions, attribution feasibility, and compliance experience that published TP proposals do not fully capture. The personal adviser corps, specified in (BEHAV §5.6), provides a structured institutional source for this intelligence that does not depend on the Allocator’s personal relationships with individual TP members.

Advisers working directly with TP members accumulate pattern-level knowledge across the full Phase One population: what taxpayers find difficult, what they are optimising around within the rules, where administrative friction is highest, and what aspects of the mechanism they find opaque. This is membrane health data at the individual level, aggregated across thirty-two thousand professional relationships.

The intelligence flows to the Allocator in aggregated, anonymised form — population-level patterns, not individual taxpayer data, which remains confidential within each adviser relationship. The Allocator’s mandatory publications should name the adviser-corps intelligence as a distinct source alongside TP chamber proposals and FS fiscal data, making the TP-sensing component of the synthesis visible and auditable by DR.

This structure is preferable to the Allocator developing TP knowledge through personal networks for two reasons. Distributed relational capital across a large professional corps is less vulnerable to the resource-defines-truth failure mode than intelligence concentrated in the Allocator’s personal contacts. And it separates the legitimacy question: is the Allocator informed about TP experience? Is the Allocator too close to specific TP members? It works by making the TP-sensing function institutional and transparent rather than personal.

B.3 The SWF Custodian

The full treatment of the SWF Custodian (mandate, solvency floor, drawdown conditions, anti-drift requirements, unit-holder governance rights, and the OBR/mandate-guardian question) is in (GOV §6.3). This section covers only the appointment principle and the statutory mandate extension process.

The Custodian is not appointed through the competitive tender process used for the Valuation Bodies and the Allocator. It is designated through statutory mandate extension: a pre-existing long-tenure, constitutionally insulated financial institution has its existing mandate extended by statute to encompass the Custodian role. In the UK reference jurisdiction, this is the Bank of England or a dedicated statutory body modelled on the Bank’s independence architecture. The appointment is a legislative act; the Governing Council has no role in selecting or removing the Custodian mid-mandate.

This departure from the appointment pattern used for other executive bodies is stated as a design choice in (GOV §4). The Custodian’s institutional competence, conservative disposition, and insulation from chamber politics are properties the relevant institution already possesses through its existing constitutional architecture. Replicating them through a Governing Council appointment process would be less reliable than inheriting them from an institution that has demonstrated them over a long institutional history. The trade-off is that the Governing Council has less direct control over the Custodian than over any other body; the check on the Custodian runs through its published mandate, the stewardship statements it commits to, and the solvency floor that operates automatically below any discretion it holds.

Operational detail of the Custodian’s conduct (bond sizing, bridging facility mechanics, drawdown conditions, stewardship statement format) is in (GOV.B §E).

B.4 The Administrator

B.4.1 What the Administrator Must Be

The Administrator is a transmission body. Its defining property is the complete absence of discretion over what it publishes, when, and how. Any organisation capable of operating a fixed-cycle, format-consistent publication function under external format specification can hold this role. The Administrator requires no financial expertise, no valuation competence, and no policy judgment — only operational reliability, constitutional insulation from chamber direction, and the technical capacity to maintain the real-time publication systems the voting mechanics depend on. Institutional form is a Phase One implementation question; the constraints any valid implementation must satisfy are specified below.

B.4.2 Appointment and Constitutional Insulation

The Administrator is appointed by the Governing Council under the standard dual-threshold vote. The same vote is required for removal. A cooling-off protection prevents removal within a minimum period of appointment (a Phase One calibration parameter, long enough to prevent appointment-then-immediate-removal cycling).

The Administrator’s constitutional insulation is operational rather than relational: it holds no discretion to exercise, so capture through relationship or pressure produces nothing. A chamber that succeeds in influencing the Administrator’s output has influenced a transmission function; the output still reflects what the system generated, just delayed, suppressed, or misformatted. All three failure modes are detectable in the permanent log by what is absent or discontinuous.

B.4.3 The Format-Consistency Requirement

The Administrator’s publication format is set externally by Governing Council decision at Phase One. Any subsequent change to that format is itself a logged, dated event in the permanent record. The Administrator may not reformat outputs for clarity, context, or emphasis; it publishes exactly what the system generates in exactly the required format.

The format-consistency requirement is the Administrator’s primary defence against definitional drift at the fast end: a date-anchored discontinuity in published outputs is locatable retrospectively even when slow drift is not. Two successive publications in different formats without a logged format-change event are evidence of a transmission failure, visible without qualitative judgment.

B.4.4 Mandatory Outputs and Publication Cycle

The Administrator’s mandatory output list includes, at minimum: all Governing Council vote results including the three-way ratio (yay, nay, non-vote) and classification veto label counts for every concluded vote; all Tier 2 session records; the taxpayer history record for each WDT participant on the fixed annual cycle; Valuation Body corroboration statistics and the aggregate flag-event record on the same annual cycle; the Allocator’s recommendation and any Governing Council departure from it before each allocation vote; the SWF Custodian’s annual stewardship statement; and Public Valuation Register outputs at the appropriate tier. The publishable-output list is protected as clause 10 of the enumerated structural clauses in (GOV §5.2).

The Administrator publishes immediately on trigger for live voting outputs and on the fixed annual cycle for periodic outputs. It holds no discretion to delay a contested result, embargo one chamber’s output ahead of another’s, or sequence publications for effect.

B.4.5 The Internal Communications System

The Administrator operates the internal communications system through which chambers submit proposals, cast votes, attach classification veto labels, and exercise withdrawal rights. It also operates the DR internal forum (member-post only, fully public to view) and the general public forum. In both cases its role is access verification and transmission only; it holds no discretion over content. The Administrator’s internal communications function and its publication function are constitutionally identical in character: both are transmission with discretion removed. The internal system is a function of the same body operating under the same format-consistency and no-discretion requirements.

B.4.6 Data Architecture: The Credential-Issuance Model

The Administrator’s data architecture implements the consistency-confirmer principle stated in (GOV §6.4).

At each assessment date, the taxpayer commits to a declared net worth figure through the Administrator’s system. The commitment is timestamped and cryptographically signed at submission; it enters the permanent log and cannot be altered retroactively. The Administrator’s verification task at the next assessment is mechanically defined: confirm that a new committed value has been submitted in the correct form; confirm that the delta calculation between the two committed values is arithmetically correct; confirm that the correct marginal rate has been applied; and issue a signed credential attesting the tax bill is correctly calculated. At no point does the Administrator assess whether committed values accurately reflect underlying asset values. That question is for the Valuation Bodies and, on Route D, for the auction mechanism. The Administrator confirms the arithmetic, not the truth.

From this sequence the Administrator generates and holds for each taxpayer a stack of verifiable credentials, one per assessment year. Each credential contains: the assessment year; a commitment to the declared net worth figure (but not the figure itself); the computed marginal rate; the resulting tax bill or refund amount; and the Administrator’s signature. The credential stack is the taxpayer’s authenticated longitudinal participation record. The taxpayer holds it, presents it selectively to third parties as circumstances require, and carries it through any closure and re-entry event. The Administrator retains a log of signing events sufficient to verify any credential’s authenticity, but does not need to retain the underlying declared values to do so.

Selective disclosure follows from the credential structure. A taxpayer presenting to a court presents the relevant years of their credential stack. A taxpayer presenting to a lender for credit assessment presents a net-worth credential without the delta history. A taxpayer re-entering the WDT presents an envelope-balance credential, which the Administrator can verify against its signing log, without the full asset-composition history entering any central store. What is disclosed, to whom, and at what level of detail is the taxpayer’s decision at the point of presentation.

Zero-knowledge proof tooling is an available extension. A taxpayer can prove to the Administrator that their committed value falls within the correct marginal-rate bracket without revealing the precise figure; the Administrator then issues a credential confirming the correct marginal rate was applied and the correct tax bill generated, without the committed value entering the Administrator’s store. Whether this extension is implemented at Phase One is a technical implementation decision. The base architecture using cryptographic commitments without zero-knowledge proofs satisfies the consistency-confirmer requirement; the zero-knowledge extension strengthens the privacy guarantee without changing the institutional design.

The verifier-learns-minimum principle applies to all parties. A counterparty verifying a taxpayer’s net-worth credential learns that the credential is validly signed and that the attested figure falls within a range; it does not learn the taxpayer’s full participation history. A court verifying envelope balance learns that the balance is correctly calculated from the accumulated credential stack; it does not learn the asset composition underlying each year’s declaration. The principle is stated here as a named architectural commitment independent of any specific cryptographic tool, so that it survives as implementation technology evolves.

The Administrator’s data store contains: a log of signing events with timestamps; proof that valid commitments exist for each assessment year for each taxpayer; the signed credentials issued; and the public verification keys required to authenticate those credentials. It does not contain a searchable database of individual net-worth figures, asset compositions, or delta histories. A compromised Administrator reveals a signing log, not a wealth database. This satisfies the no-monopoly principle in (GOV §2.1): the underlying data remains with the taxpayers who generated it.

B.4.7 The Privacy Election: Binary Disclosure and the Rate Differential

At each annual submission, a taxpayer tags each asset (or, for fungible assets, each portion) as disclosed or private. Disclosed assets attract a rate discount from the standard marginal rate; private assets attract a rate premium. The Administrator receives both portions, confirms the delta calculation is correct across the full declared net worth, applies the correct rate to each portion, and issues credentials accordingly. What flows into the public register is only the disclosed portion.

The disclosed/private election rides on top of the four valuation routes: a Route A (professional, fungible) position may be tagged as disclosed or private, as may a Route D (self-declared, non-fungible) position. The election is made at submission time and may change between assessment years.

Non-fungible assets require whole-asset election. A piece of art or an unlisted equity stake cannot be split between disclosed and private portions and retain independent valuation integrity; the basis history of a non-fungible position cannot be consistently maintained if parts of it are declared under different transparency regimes in the same assessment year. For fungible assets, partial-assignment works cleanly: a taxpayer holding £10m in listed equity may elect £7m disclosed and £3m private.

The correct framing of this election is not that privacy costs more. Disclosed taxpayers provide a public good (democratic visibility of the wealth base) at personal cost through disclosure; private taxpayers contribute to the same public good financially through the premium. Both routes serve the democratic-visibility goal; the election is a choice between two equivalent forms of participation. The Governing Council’s framing in taxpayer-facing communications should carry this characterisation.

The rate differential coefficient is a single Governing Council calibration parameter. At each marginal rate bracket k, the disclosed rate is \(\tau\)(k) minus the discount coefficient times k; the private rate is \(\tau\)(k) plus the premium coefficient times k. The existing progressive rate structure means the absolute value of the differential grows with wealth without a separate progressive schedule for the privacy election. Phase One election data provides the input for the Governing Council’s first calibration of the coefficient.

The constraint on the coefficient is that the rate discount on disclosed assets must not fall to zero. A zero discount eliminates the incentive to disclose; the democratic-visibility goal is then served only by the premium, which converts the framing from a choice to a penalty for privacy. The Governing Council holds discretion within the range between a perceptible discount and a discount large enough to distort taxpayers toward disclosure at the cost of their privacy interests; Phase One data establishes where in that range the coefficient should sit.

The aggregate statistical picture — distributional snapshots, delta flow data, asset-class aggregates — is generated from the full taxpayer population including fully private declarations. Generating those aggregates requires only the committed values and the tax calculations confirmed by the Administrator’s credential-issuance process; it does not require the underlying asset composition of private declarations to enter any central store. Full privacy for any individual taxpayer is therefore compatible with the mechanism functioning identically in every dimension that matters: revenue is correctly calculated, refund symmetry operates, the Route D auction deterrent rests on the committed declared value rather than on public visibility, and the lifetime contribution envelope is confirmed through credential presentation at re-entry without requiring individual asset history to be centrally held.

Taxpayers with documented personal security concerns (credible threats, witness-protection status, equivalent circumstances recognised under the relevant jurisdiction’s law) are eligible for an exemption from the rate premium on private assets, subject to a verified application process. The exemption addresses the asymmetry between privacy as a tax optimisation strategy and privacy as a personal safety requirement; the former carries the premium, the latter does not. The verification function sits with the Administrator, which confirms eligibility from the relevant authority’s records without storing the underlying personal security details in its own system.

C. Voting Mechanics in Full

C.1 The Dual-Threshold Calculation: Worked Arithmetic

The dual-threshold pass rule in (GOV §5.1) has two conditions. Condition one catches organised opposition: if enough voters actively oppose a proposal, it fails regardless of how many support it. Condition two catches thin support: if yays do not outnumber nays among those who actually voted, the proposal fails regardless of how few opposed it. A proposal must clear both; passing one does not compensate for failing the other.

Let T denote the nay threshold. Let Y denote yay votes, N nay votes, and V non-votes, where Y + N + V equals total possible votes. The two conditions are:

Condition one: N < T. Nays must stay strictly below the nay threshold.

Condition two: Y > N. Yays must outnumber nays among votes actually cast. Non-votes are excluded from this calculation entirely; the denominator is Y + N only.

T is defined as equal to DR’s vote share and tracks it automatically. Under the current constitutional allocation of 50/25/25, T = 50. If the allocation were changed through the structural amendment process in (GOV §5), T would move with DR’s share by definition.

The critical threshold at T = 50. T = 50 is the threshold above which the two conditions are not independent, and below which they are. The proof is direct. Suppose condition two holds: Y > N. Since Y + N + V = 100 and all quantities are non-negative, Y > N implies N < 50. If T ≥ 50, then N < 50 ≤ T, so condition one is automatically satisfied whenever condition two holds. Condition two subsumes condition one for any proposal that would pass. Conversely, if T < 50, a vote distribution with Y > N but N ≥ T is possible: condition two holds, condition one fails, and the proposal is defeated despite a majority of voters supporting it. At T ≥ 50, condition one is dormant for all passing proposals; at T < 50, all four logical combinations become reachable.

N < T	Y > N	Outcome
✓	✓	Pass
✓	X	Fail (thin support)
X	✓	Fail (organised opposition)
X	X	Fail (both)

At T ≥ 50 the third row is arithmetically unreachable, because N ≥ T ≥ 50 requires N ≥ 50, and Y > N ≥ 50 requires Y + N > 100, which cannot happen. At T < 50 the third row becomes a live case: a well-organised minority holding exactly T votes can defeat a proposal that commands a majority of those who turn out. This is a different constitutional character from the T ≥ 50 regime.

The design implication of the current 50/25/25 allocation. The current T = 50 means the system operates under a single effective condition: Y > N. Condition one does not constrain passing proposals; it constrains only failure cases that are already arithmetically impossible. Because DR’s share is fixed by the anti-collusion guarantee and clause 9 of the enumerated structural list, T is always 50 under the current architecture. The only route to T < 50 is a structural amendment to DR’s share, itself requiring the dual-threshold vote at the cost of permanent rebalancing, with DR’s unanimous opposition independently sufficient to block it. Phase One calibration of the TP/FS split does not affect T. If the allocation were changed through (GOV §5.2) such that DR’s share fell below 50, T would track DR’s share downward, condition one would become an active independent constraint, and the system would gain a minority-blocking property the current allocation deliberately does not have. Any structural amendment to DR’s share changes the character of the voting system as a whole, not merely the power balance between chambers. This is part of the reason DR’s share is protected as an enumerated structural clause.

Worked examples at T = 50 (current 50/25/25 allocation). Total possible votes = 100.

Y = 30, N = 20, V = 50: condition one holds (20 < 50), condition two holds (30 > 20). Passes despite sixty percent non-participation.

Y = 1, N = 30, V = 70: condition one holds (29 < 50), condition two fails (1 < 29). Fails; near-unanimous abstention does not manufacture a pass.

Y = 26, N = 25, V = 49: condition one holds (25 < 50), condition two holds (26 > 25). Passes on the narrowest possible margin.

Worked examples at T = 33 (illustrative alternative allocation). Total possible votes = 100. The conditions are independent and all four logical outcomes are reachable.

Y = 40, N = 20, V = 40: both conditions hold. Passes.

Y = 25, N = 30, V = 45: condition one holds (30 < 33), condition two fails (25 < 30). Fails on thin support.

Y = 34, N = 33, V = 33: condition one fails (33 is not < 33), condition two holds (34 > 33). Fails despite a majority of voters supporting it. This outcome is constitutionally impossible at T = 50; it is routine at T = 33.

Y = 60, N = 32, V = 8: both conditions hold (32 < 33, 60 > 32). Passes with strong turnout and comfortable margin on both axes.

The T = 33 examples confirm that the choice of allocation is not cosmetic. A lower DR share activates condition one as an independent constitutional constraint, changing the voting system’s character. Phase One calibration of the allocation determines not just the relative power of the chambers but which version of the dual-threshold rule the system operates under.

The exclusion of non-votes from condition two is load-bearing regardless of T. If non-votes counted toward the denominator, a proposal could pass with only a small fraction of the electorate actively supporting it whenever turnout was low. Excluding non-participation requires an actual majority among those who vote, while condition one ensures that organised opposition is not drowned out by indifference. The two conditions address different problems; neither is redundant, though at T ≥ 50 condition one’s contribution is limited to failure cases only.

The three-way ratio (Y, N, and V as shares of total possible votes) is published with every concluded vote alongside the classification veto label count. A proposal that passes with a high V share is visibly thin, even if it clears both conditions technically. The ratio functions as a continuous legitimacy signal independent of the pass or fail outcome.

C.2 Tier 1 Voting: Schedule, Cycle Length, and the Administrator’s Logistical Discretion

Tier 1 votes operate on a fixed schedule managed by the Administrator. Votes open and close automatically according to predefined voting cycles; the Administrator holds no discretion over when a cycle opens, when it closes, or whether a concluded result stands. The cycle length, voting duration within each cycle, and maximum number of proposals active within a single cycle are all Phase One calibration parameters.

The Administrator holds logistical discretion within this framework, and the boundary between logistical and outcome discretion is fixed in advance and not something the Administrator can redefine. Logistical discretion covers: scheduling a proposal within the correct cycle window when the submission queue contains multiple proposals; resolving a clash between two simultaneously submitted proposals requiring the same voting slot; and communicating the schedule to chambers. Outcome discretion — determining which proposals are valid, judging whether a submitted proposal touches the enumerated structural list, deciding when a vote has closed, or assessing whether a result stands — is never the Administrator’s to exercise. Any exercise of logistical discretion is logged as a dated event.

A Tier 1 vote that receives no DR participation produces a valid result. DR’s non-participation at Tier 1 is a deliberate feature. DR members who observe a Tier 1 vote in progress and judge it to have structural character retain the full suite of escalation options (classification veto label and seat-burn) throughout the voting window and after it closes.

C.3 Tier 2 Timing: Two Triggers, Two Moments, Three Cases

Two trigger mechanisms exist for non-automatic Tier 2 review: a classification veto-label majority and a DR seat-burn. They are not symmetric in when they can fire. A veto-label majority can only accumulate during an open Tier 1 voting window; once a Tier 1 vote has concluded, the mechanism cannot fire retrospectively. A seat-burn can fire at any time with no deadline.

This asymmetry produces three cases.

Case one: a veto-label majority fires during an open Tier 1 window. The Tier 1 vote is cancelled at the moment the label majority is crossed; prior votes are discarded and the window closes. A fresh Tier 2 session is scheduled with chronological priority. All chambers must participate under mandatory full-turnout. The cancellation of prior votes is intentional: reclassification to Tier 2 is significant enough that all voters should reconsider under the new mandatory conditions, rather than carrying forward intentions formed under the lighter Tier 1 regime. The proposing chamber retains the right to withdraw before the Tier 2 session concludes.

Case two: a seat-burn fires during an open Tier 1 window. Mechanics are identical to Case one. The Tier 1 vote is cancelled, prior votes are discarded, and a fresh Tier 2 session opens with mandatory full turnout. The proposing chamber retains the withdrawal right until the Tier 2 session concludes.

Case three: a seat-burn fires after a Tier 1 vote has already concluded. This is the only route to retrospective Tier 2 review; the veto-label mechanism cannot produce it. Once a vote has concluded, withdrawal is not available to the proposing chamber — allowing withdrawal to dodge retrospective scrutiny would empty the after-the-fact trigger of its function. A fresh Tier 2 vote runs to conclusion under mandatory full-turnout. If the Tier 2 vote reaffirms the original Tier 1 result, no rebalancing cost attaches. If the Tier 2 vote overturns the original result, the rebalancing cost attaches as though the proposal had been classified as structural from the outset.

In Cases one and two, the rebalancing cost attaches on conclusion regardless of outcome because the proposing chamber chose to let a contested proposal run rather than withdraw. In Case three, the cost attaches only on overturn, because the chamber had already committed by allowing the Tier 1 vote to conclude without challenge.

C.4 The Classification Veto: Mechanics, Real-Time Publication, and the Label Distribution Baseline

The classification veto label is cast in the same act as the substantive vote, simultaneously with a yay, nay, or abstention; it is not a separate procedural step and cannot be cast independently of a substantive vote. A voter who casts a label without a substantive vote position has not cast a valid label.

The label threshold for reclassification is a simple majority of votes actually cast (non-votes excluded from the denominator, as in condition two of the dual-threshold rule). If more than half of the votes cast carry a label, the proposal is reclassified to Tier 2 and the Case One mechanics in (GOV.B §C.3) apply from the moment the majority is crossed.

The Administrator publishes label counts in real time alongside vote tallies throughout the open voting window. The label count, total votes cast, and current label majority threshold are all continuously visible to every participant. A participant watching the label count approach the majority threshold has a real-time signal of impending reclassification and a simultaneously visible withdrawal option on the Administrator’s interface; (GOV §6.4) requires these two elements to be visible in the same view.

The statistical distribution of label activity across all proposals over time is part of the permanent public record. This distribution forms a revealed baseline: the typical rate of label attachment across proposals not contested as structural, established by the system’s own history rather than by any qualitative judgment. A proposal attracting statistically anomalous label activity is legible to any observer without requiring anyone to render a verdict on whether the proposal is actually structural. A DR member using the visible label distribution as a basis for deciding whether to burn their seat is acting on grounded information; (GOV §5.3) identifies this as the intended interaction between the two escalation mechanisms.

The label distribution baseline is a lagging measure: it takes time to accumulate enough proposals to establish a meaningful baseline. The Phase One implementation paper must address how the system handles the early period before the baseline is established: whether a fixed initial threshold substitutes for the statistical baseline, and at what point the transition to the historical baseline occurs.

C.5 Proposal Initiation Quorum: Chamber-Level Mechanics

The internal quorum process is identical across TP and FS, applying the dual-threshold logic at the chamber level. DR has no proposing right and no internal quorum process.

For TP, the mechanics are as specified in (GOV.B §A.1.4): any member may initiate a draft through the Administrator’s internal system; the draft is visible to all current TP members; and it becomes the chamber’s proposal once a yay majority among internal voters is achieved, with non-votes excluded from the denominator. The internal vote is recorded in the permanent log but not broadcast in the real-time public feed until the quorum is cleared.

For FS, the same outcome is required (a chamber proposal commanding majority support among members) but the procedure is jurisdiction-specific. The WDT requires only that the procedure produce majority support and that the chairman holds no additional weight in any formal determination. The Phase One implementation paper confirms the applicable procedure. Once a proposal clears FS’s internal process, it enters the Governing Council queue on the same terms as a TP proposal.

A proposal that fails to clear either chamber’s internal quorum is not a Governing Council proposal and carries no cost. Repeated internal failures are not recorded in the public-facing permanent log, only in the Administrator’s internal record accessible to chambers. The rebalancing cost attaches only once a proposal reaches the Governing Council level and, within the Governing Council, only on conclusion under Tier 2 as specified in (GOV §5.3).

C.6 Withdrawal: The Single Unilateral Act and Its Timing Constraints

Withdrawal is the proposing chamber’s right to terminate its own proposal before that proposal’s first conclusion. It may be exercised either by the individual member who initiated the proposal acting unilaterally, or by a majority quorum of the chamber using the same internal dual-threshold logic that governs proposal initiation in (GOV.B §C.5). Either route produces a valid withdrawal; no counter-signature from another chamber, no approval from the Administrator, and no external discretion is required. The Administrator’s interface surfaces the withdrawal option on every active proposal alongside the current vote tally, label count, and label majority threshold; all four elements are visible in the same view at all times during the voting window.

Withdrawal is available at any point before a proposal’s first conclusion, for any reason or none, at zero cost. After a proposal’s first conclusion, withdrawal is not available. A chamber that allows a proposal to run to conclusion has committed, and the flat-cost principle from (GOV §5.3) applies.

Individual withdrawal by the initiating member is appropriate where the member judges proceeding is no longer worth the cost — watching classification veto labels accumulate toward the reclassification threshold, for example. Chamber-quorum withdrawal is appropriate where the chamber as a whole has shifted its view. Both routes are legitimate; neither requires the other’s agreement.

The withdrawal option persists through Tier 2 escalation under Cases one and two in (GOV.B §C.3). A proposal reclassified to Tier 2 has not yet concluded; the proposing chamber retains the withdrawal option until the Tier 2 session itself concludes. Under Case three, withdrawal is not available for the reasons stated in (GOV.B §C.3).

C.7 Missed Tier 2 Votes: Consequences by Chamber

Tier 2 is mandatory for DR and carries a constitutional consequence for non-participation. For TP and FS the position differs: neither can be individually compelled through WDT mechanics, and the architecture does not treat their non-participation as a constitutional failure in the same sense.

For DR, a missed Tier 2 vote revokes the seat immediately and automatically. There is no exemption, no grace period, and no process requiring a judgment about whether the absence was excusable. DR’s watchdog role is constitutionally real because the cost of non-participation is what makes participation binding. The remaining DR members’ shares rebalance automatically using the arithmetic in (GOV.B §A.3.5). The seat vacancy is filled at the next scheduled monthly draw.

For TP, individual compulsion is not available and is not attempted. A TP member who does not vote in a Tier 2 session faces no structural consequence. Non-participation is recorded in the three-way ratio and functions as a legitimacy signal over time; a Tier 2 result achieved with very low TP participation is visible as such in the permanent record.

For FS, Tier 2 non-participation carries no WDT-specific individual consequence. A qualifying office-holder who fails to vote carries that failure into their existing constitutional accountability structures: parliamentary accountability, statutory duties, judicial review. The WDT records FS’s Tier 2 participation rate in the permanent public log on the same basis as TP’s.

D. The Rebalancing Mechanism in Full

D.1 Conservation Arithmetic: How Vote Share Moves

The rebalancing mechanism moves vote share between TP and FS only. DR’s share is fixed permanently at fifty percent and is untouched by any rebalancing event. Total system vote share is conserved at one hundred percent at every step; no share is created or destroyed.

Let s_TP and s_FS denote TP’s and FS’s current shares respectively, where s_TP + s_FS = 50 at all times. When a rebalancing cost is triggered by a structural proposal originating in TP, TP’s share decreases by one increment r and FS’s share increases by the same amount: s_TP becomes s_TP − r, s_FS becomes s_FS + r. When the cost is triggered by an FS proposal, the movement is in the opposite direction.

The increment r is a Phase One calibration parameter subject to three constraints: large enough that the cost is perceptible; small enough that a single structural proposal does not catastrophically erode a chamber’s capacity to participate in ordinary governance; and identical in both directions, since an asymmetric increment would build in long-run drift toward the chamber facing the smaller cost.

An illustrative sequence. TP and FS start at 25/25. FS originates a structural proposal that runs to Tier 2 conclusion. r = 1. FS moves to 24, TP moves to 26, DR stays at 50. FS originates a second structural proposal. FS moves to 23, TP moves to 27. TP then originates a structural proposal. TP moves to 26, FS moves to 24. The system is now at 50/26/24. A structural proposal withdrawn before its Tier 2 session concludes triggers no rebalancing cost. Conservation holds through withdrawals.

D.2 No Floor: The Cost Is Unconditional

The rebalancing cost is flat, permanent, and without a lower bound. A chamber that originates structural proposals repeatedly will find its vote share reduced by the same increment with each conclusion. There is no mechanical rescue.

A floor would require the architecture to protect a chamber from the accumulated consequences of its own members’ deliberate decisions — decisions that required an internal quorum at each step, made with the cost visible and consistent throughout. A chamber cannot be driven below a floor involuntarily; it can only erode its own standing through repeated structural proposals its membership chose to advance. Every rebalancing event is a logged, dated, public record. The share history is part of the permanent decision archive. A chamber approaching zero share does so transparently, with every step attributable to a specific concluded proposal.

D.3 TP/FS Split Dynamics Over Time

The starting position (TP and FS each at twenty-five percent) is a Phase One calibration parameter. The constraint is derived: their combined share must equal fifty percent, so that DR’s share is no smaller than their combined total, satisfying the anti-collusion guarantee in (GOV §5.1) and clause 9 of the enumerated structural list. The specific internal split at baseline is open; parity is the simplest starting point but not the only valid one.

Over time, the TP/FS split drifts toward the chamber that originates fewer structural proposals. This creates an asymmetric dynamic: the chamber with a long-horizon interest in retaining governance influence has a structural incentive to be conservative about structural proposals, while the chamber willing to spend share can use it as a form of credible commitment, demonstrating that it believes in a structural change enough to accept a permanent cost for it.

Parity is stable only if both chambers make structural proposals at exactly the same rate. In practice the split will drift, and the direction of drift is informative: it reflects which chamber has been more willing to spend its standing on structural change.

The cross-chamber negotiation incentive in (GOV §5.3) follows from this. A chamber that wants a structural change but is reluctant to bear the full rebalancing cost alone can negotiate with the other chamber to share the cost: one chamber absorbs this cycle’s cost in exchange for the other committing to absorb a future one. Such an agreement is not a formal procedural category; it is ordinary inter-chamber politics. The architecture creates the incentive without regulating how it takes place.

D.4 Self-Policing and Its Conditions: Why Fixed Chamber Structure Is Load-Bearing

The rebalancing mechanism’s group-level cost (the whole chamber’s share moving rather than just an individual member’s) only produces peer-policing pressure if two structural conditions hold.

First, the chamber must be small and mutually visible enough that members can observe each other’s behaviour and act on the incentive the group cost creates. A member of a small, formally seated chamber knows that their support for a structural proposal costs every other member a fraction of shared standing; that knowledge creates real pressure against reckless proposals. A member of a large, diffuse population sharing nothing but a label cannot exercise the same pressure.

This is why fixed, exogenously determined chamber membership is a precondition for the mechanism. If membership were voluntary or self-formed, the proposing faction could recruit nominal members specifically to dilute the per-member cost, reducing the group pressure to near zero — the same attribution-dilution failure CORP had to solve on the ownership side. Fixed membership eliminates this: a member cannot opt out of sharing the cost of a proposal they opposed internally, and the proposer cannot expand the chamber to reduce their exposure.

Second, the chamber’s internal vote record must be accessible to chamber members after the fact, so that members who bore the cost of a structural proposal can identify which peers supported it. This does not require the internal vote to be publicly broadcast; it requires that the Administrator’s internal log, accessible to any chamber at any time at no cost, preserves the internal quorum record. Without that record, the group cost is a shared tax with no attribution; with it, accountability runs to specific decisions by specific members.

TP’s large and diffuse membership means the first condition holds only weakly for TP. The per-member cost is small for a large chamber; social pressure is correspondingly weaker. This is a named limitation, not an overlooked design flaw. The architecture’s response to TP’s collective wealth concentration operates through the 50/25/25 split and the anti-collusion guarantee, not through peer-policing within TP. FS, being smaller and more formally seated, satisfies both conditions more reliably.

E. The SWF: Operational Detail

E.1 The Solvency Floor: Definition and the Automatic-Consequence Principle

The solvency floor is a hard threshold expressed as a ratio of the fund’s liquid assets to its aggregate outstanding liabilities: refund obligations, active bridging facility commitments, and operating costs. The specific ratio is a Phase One calibration parameter and a Governing Council decision, informed by the Norwegian Government Pension Fund Global and the Chilean Pension Reserve Fund precedents identified in (GOV §6.3) as the reference models for Phase One consultation.

What is not a Phase One question is the principle governing the floor’s operation. When the solvency ratio falls below the floor, automatic consequences follow without requiring a discretionary review or a Governing Council vote. The specific consequences (restrictions on the Custodian’s discretion, mandatory reporting obligations, temporary constraints on new bridging facility commitments) are Governing Council decisions calibrated to the circumstances at Phase One. The consequences are pre-specified, automatic, and do not depend on any party judging whether the breach was serious enough to warrant a response. The floor is a number, not a judgment call; crossing it is a fact.

The solvency ratio is computed on the same annual cycle as the assessment day. Intra-year monitoring is an operational matter for the Custodian; the annual assessment-day figure is the constitutional reference point against which the floor is tested and published. Aggregate bridging facility commitments outstanding at any point count toward the ratio on the same basis as refund liabilities. The Custodian may not treat bridging commitments as off-balance-sheet for solvency purposes; they are prior claims on the fund in the same category as the refund obligation.

E.2 Drawdown Conditions: Pre-Crisis Commitment and the Annual Publication Cycle

The Custodian is required to publish its drawdown conditions before any crisis arrives. This pre-crisis commitment is one of the three structural anti-drift requirements in (GOV §6.3).

The drawdown conditions are published annually, coinciding with the assessment day cycle. The annual publication is a reaffirmation and update cycle, not a revision process. The Custodian publishes its current drawdown conditions as part of its annual stewardship statement (GOV.B §E.5). Where conditions have changed from the prior year, the change and its rationale must be explicitly identified rather than absorbed silently into updated language. Any change to published drawdown conditions is therefore a dated, attributable, publicly visible event.

The drawdown conditions, once committed in a stewardship statement, sit behind the same protection as an enumerated structural clause for the period until the next annual statement. An informal communication or supplementary note cannot modify them mid-cycle; only the next scheduled annual statement constitutes a valid update. This closes the channel by which periodic review could otherwise erode the original commitment between formal publication dates.

The specific content of the drawdown conditions is a matter of financial expertise and is the Custodian’s to determine within its mandate. This paper specifies the publication requirement and the update discipline. A Custodian whose published conditions prove systematically inconsistent with its actual conduct has created a visible, dateable record of that inconsistency without any oversight body needing to construct the case.

E.3 The Bridging Facility: Bond Posting Sequence and Settlement

The full structural design of the bridging facility (the symmetric bond structure, the three delta-direction cases, and the rationale for decoupling departure from settlement) is in (GOV §6.3). This section covers the operational sequence and the implementation principles the Governing Council’s bond-sizing calibration must satisfy.

The operational sequence. The taxpayer declares an intended exit date through the Administrator’s system, initiating the bond calculation process. The Custodian calculates the expected direction and magnitude of the final delta based on the taxpayer’s declared asset values and current assessment window position. Bonds are posted before the taxpayer’s declared exit date; the minimum notice period the taxpayer must give is a Phase One calibration parameter.

Where the expected delta is positive, the taxpayer posts a bond proportional to the estimated liability before departure; the Custodian holds it as secured collateral within the jurisdiction. Where the expected delta is negative, the SWF posts a bond to the taxpayer as security for the expected refund; the taxpayer holds it. Where the delta direction is uncertain, both sides post proportional bonds reflecting their respective exposure; the bonds net against each other on settlement. Departure before bond posting is not permitted.

Settlement occurs when the valuation and assessment process completes after departure. The relevant bonds are released and the net amount owed transfers in the appropriate direction. Bond release on a negative delta is always in full, plus any refund owed; the bond is not partially forfeited in a loss year. The symmetric commitment of the state at exit mirrors the symmetric refund commitment during the assessment period.

Bond-sizing principles. The specific bond-sizing ratios are Governing Council parameters calibrated against Phase One exit data. Two constraints: the taxpayer-side bond must be large enough that the Custodian’s secured position is not materially exposed to cross-border enforcement risk if the taxpayer fails to settle; and the state-side bond must be large enough that the taxpayer has adequate security for their expected refund. A state-side bond calibrated to a fraction of the expected refund does not satisfy the reciprocal commitment the cooperative architecture requires.

The Custodian holds administrative execution of the bridging facility as part of its mandate, including managing the bond calculation, coordinating with the Administrator on the declaration process, holding taxpayer-side bonds as secured collateral, issuing state-side bonds to departing taxpayers, and executing settlement when the assessment process concludes.

The SWF holds three distinct credit instruments addressing different liquidity mismatches. The bridging facility here addresses the timing mismatch between an individual’s physical departure and settlement of their WDT position at closure. The sovereign liquidity facility (VAL §13) addresses the mismatch between an individual taxpayer’s annual WDT liability and their available cash, providing a secured credit line against declared asset value for taxpayers on any cash-settled route. The corporate equity settlement facility (GOV.B §H) addresses the mismatch between a listed company’s assessment-date levy and its cash generation cycle. All three are held in separate SWF portfolios with distinct mandate specifications and separate reporting lines in the annual stewardship statement.

E.4 Unit-Holder Rights: Financial Rights, Investment Input, and the Solvency-Trigger Threshold

Where a taxpayer receives a loss-year refund in SWF units rather than cash, those units confer two categories of right, with a third category activating only on a solvency floor breach.

Financial rights are unconditional and attach to every unit regardless of the fund’s solvency position. They include the economic entitlement the unit represents (a proportional claim on the fund’s net asset value), information rights covering the fund’s investment portfolio, performance, and solvency position on the same annual cycle as the assessment day, and the right to transfer or redeem units subject to the fund’s own constitutional documents.

Investment preference input is the standing right through which unit-holders participate in decisions about how the fund is invested. The mechanism for aggregating and expressing this input (periodic surveys, an elected advisory committee, or a formal vote on broad investment mandate parameters) is a matter for the fund’s own constitutional documents. This paper specifies that the right exists, that it covers investment mandate parameters rather than day-to-day portfolio decisions, and that it is structurally separate from the Governing Council’s governance architecture: holding units confers no vote, no seat, and no standing of any kind in the Governing Council.

Governance activation rights are dormant under normal operating conditions and activate only on a solvency floor breach. On breach, unit-holders gain temporary voting rights on the fund’s constitutional documents (investment mandate changes, redemption condition modifications, and equivalent structural matters) that they do not hold during normal operation. Unit-holders who accepted units over cash did so partly because of the refund guarantee those units represent. A solvency floor breach directly threatens both the value of their existing units and the credibility of future refund guarantees. At that moment, unit-holders have the strongest and most aligned incentive to participate in decisions about how the fund responds. Activating governance rights at the solvency threshold rather than at all times keeps the fund’s constitutional governance clean during normal operation while providing an additional check at the moment of highest stakes.

The specific governance activation rights (what decisions unit-holders may vote on during a breach period, what majority is required, how activation and deactivation of those rights is determined) are matters for the fund’s own constitutional documents. The activation threshold this paper establishes: the solvency floor breach, the same event that triggers the automatic consequences in (GOV.B §E.1), also activates unit-holder governance rights. The two mechanisms fire simultaneously from the same trigger.

Unit-holder self-interest in fund solvency reinforces the Custodian’s mandate from the bottom up. The Custodian’s check runs through its institutional obligations and published commitments; the unit-holder check runs through direct financial self-interest. Two independent checks operating in different currencies are stronger than one, at the cost of maintaining an internal fund-governance layer alongside the Custodian’s external mandate.

E.5 Stewardship Statements: Annual Cycle, Mandatory Content, and the Ratcheting Commitment

The Custodian publishes an annual stewardship statement coinciding with the assessment day cycle. The statement is a mandatory Administrator output: it enters the permanent public record on the same fixed-cycle, no-discretion basis as all other system outputs, and any failure to publish on schedule is visible by its absence. The stewardship statement is published within a fixed window after assessment day, the specific length of which is a Phase One calibration parameter.

The mandatory content includes: the fund’s current solvency ratio and its supporting calculation; the aggregate refund liability outstanding; aggregate active bridging facility commitments; the fund’s investment portfolio in sufficient detail to permit independent assessment of its composition and risk profile; the Custodian’s current drawdown conditions as specified in (GOV.B §E.2), with any changes from the prior year’s statement explicitly identified; the Custodian’s assessment of the fund’s long-term stability and any material risks to it; and the unit-holder count and aggregate unit value.

The ratcheting commitment property described in (GOV §6.3) operates through the accumulation of successive stewardship statements in the permanent record. A Custodian that states in year one that its drawdown conditions are conservative and its portfolio is well-positioned, and then states in year five that it has shifted toward less conservative holdings, has created a visible record of that shift without any oversight body needing to construct the case. The value of the ratcheting commitment increases with time. This is why overlapping, long, non-renewable tenure for the Custodian’s leadership is load-bearing alongside the stewardship statement cycle: tenure long enough that a significant body of stewardship statements accumulates under a single leadership team creates a clearer and more attributable record of institutional conduct than rapid turnover would produce.

E.6 Institutional Mapping: Mandate Extension Process (UK Reference)

The UK-specific institutional mapping is stated in (GOV §6.3): the Custodian maps to the Bank of England, specifically the Governor, or to a dedicated statutory body modelled on the Bank’s existing independence architecture. The appointment is a statutory mandate extension rather than a new appointment process.

The mandate extension process has two operational requirements. First, the extended mandate must explicitly incorporate the solvency floor, the drawdown condition publication requirement, the stewardship statement cycle, and the bridging facility as named obligations, not as discretionary matters the institution may choose to address within its broader remit. The extension must be precise enough that the Custodian’s obligations under the WDT architecture are not absorbed into general institutional discretion. Second, the tenure arrangement for the WDT-specific mandate must satisfy the overlapping, long, non-renewable structure specified in (GOV §6.3). Where the underlying institution’s existing tenure structure does not satisfy this requirement (for example, where the Governor’s term is renewable rather than non-renewable), the mandate extension must specify a separate non-renewable tenure for the WDT-specific obligations.

The specific statutory vehicle, the parliamentary process, and the legal interaction with the Bank of England Act 1998 and related legislation are jurisdiction-specific implementation questions assigned to JUR.

E.7 Custodian Investment Mandate: Inflationary Conditions

The Custodian’s standing investment mandate includes a continuous instruction to rotate Route C equity positions into the fund’s low-correlation asset allocation. Route C settlement delivers equity stakes in assessed companies to the fund at declared valuations; the mandate requires converting those positions into the low-correlation portfolio at a pace the Custodian determines within its mandate rather than holding concentrated company equity indefinitely.

In an inflationary period, this rotation mechanism has a countercyclical property the mandate should operationalise explicitly. When nominal equity valuations are elevated, Route C equity stakes arriving at elevated nominal valuations are sold into a hot equity market as the Custodian rotates them to low-correlation holdings. This withdraws nominal purchasing power from equity markets at the same time the inflation is running. The mechanism operates through asset sale rather than through the SRR ring-fence; it does not reduce the fund’s capacity to meet refund liabilities, because the proceeds remain within the fund and are reallocated rather than distributed.

The mandate extension in (GOV.B §E.6) should carry explicit guidance on rotation pace under defined inflationary conditions. Two parameters. First, an inflationary trigger: a threshold rate of CPI change (or equivalent price index specified by the Governing Council), sustained over a minimum period, above which the Custodian is directed to accelerate rotation pace. This threshold is a Governing Council calibration parameter. Second, an accelerated rotation pace: the Custodian’s instruction at and above the trigger is to clear incoming Route C equity positions into the low-correlation portfolio within a defined maximum holding period shorter than the baseline holding period. The maximum holding period at the accelerated pace is a Governing Council calibration parameter.

Both parameters are stated in the Custodian’s mandate rather than left to discretion at the moment of crisis. Discretion at crisis-point is precisely what the pre-crisis commitment requirement in (GOV.B §E.2) is designed to foreclose. The parameter values are committed in advance and apply automatically when the trigger conditions are met.

The interaction with labour relief disbursement pace is a separate but complementary countercyclical instrument. Slowing labour relief disbursement during an inflationary period reduces fiscal stimulus at a moment when that stimulus is contributing to demand pressure. The Governing Council controls the disbursement pace through its standard proposal process; the Custodian controls the rotation pace through its mandate. The two instruments operate through independent channels simultaneously, and neither triggers the other. The independence of the two channels is a feature: a single lever controlling both would reintroduce a concentration of countercyclical authority the architecture is designed to avoid.

The specific parameter values are Phase One calibration decisions, informed by Phase One SWF data and the Custodian’s own assessment of the fund’s operational capacity for accelerated rotation. The parameters then appear in the Custodian’s updated mandate and are published in the next annual stewardship statement with any prior-year changes explicitly identified per (GOV.B §E.5).

A parallel execution-discretion principle applies to the Custodian’s rotation mandate and countercyclical deployment. Strategic allocation targets — proportions held across asset classes, the low-correlation asset requirement, the countercyclical deployment commitment — are fully public and subject to the mandatory stewardship statement cycle. Tactical execution within those targets is not disclosed in advance. The timing and sequencing of specific rotation transactions, the instruments used to achieve drawdown, and the moment of countercyclical deployment are within the Custodian’s operational discretion and are not pre-announced. This separation of mandate transparency from execution transparency is standard practice among large sovereign wealth funds and is necessary to prevent sophisticated market participants from front-running predictable rotation events. For the countercyclical deployment case, trigger thresholds are published after activation rather than before: the Governing Council pre-commits the conditions internally; the public record shows what was triggered and when; the threshold itself is disclosed contemporaneously with activation. This preserves democratic accountability for the decision while maintaining the operational ambiguity that makes countercyclical intervention effective.

F. Per-Actor Cost Mechanisms

F.1 Patient Wealth (TP and FS): Vote-Share Rebalancing

The cost mechanism for TP and FS is vote-share rebalancing, triggered automatically on Tier 2 conclusion for any structural proposal. The full arithmetic is specified in (GOV.B §D). This section states the design-space constraints the Governing Council must operate within and explains why vote-share rebalancing is the right currency for this actor type.

The Governing Council sets the rebalancing increment r at Phase One. Any valid value of r must satisfy two constraints. It must be perceptible: an increment so small that a chamber can propose structural changes in rapid succession without its accumulated cost registering in any practical governance calculation provides no real deterrent. It must not be catastrophic: an increment so large that a single structural proposal strips a chamber of ordinary legislative capacity would chill legitimate reform beyond what the architecture intends. The increment must be identical in both directions; an asymmetric increment would build in long-run drift toward the chamber facing the smaller cost.

Beyond r, the Governing Council has no further discretion over the rebalancing mechanism’s structure. The conservation property (total vote share always sums to one hundred percent) is structural. DR’s fifty percent is fixed by the anti-collusion guarantee and is unreachable by the rebalancing mechanism in any direction.

Vote-share rebalancing is the right currency for TP and FS because each successive structural proposal by a chamber reduces that chamber’s future capacity to govern. A chamber pursuing capture through a sequence of structural changes finds its own power progressively diminished by the very acts it is using to capture the system. The cost structure is self-defeating: the only proposals a rational chamber would pay it for are those it judges worth a permanent reduction in its governance standing, which selects for proposals that serve the system’s long-term stability rather than the chamber’s short-term interest.

F.2 Short-Horizon Political Actors: Public Valuation Register Disclosure

When a TP proposal clears its internal chamber quorum and enters the Governing Council queue, the Administrator automatically publishes, as part of the proposal record, a snapshot of the proposing member’s most recently submitted assessment period as it appears in the Public Valuation Register. The snapshot covers declared asset values, asset classifications by route, and the entry bases from which future deltas will be measured. It is drawn from the register as it stood at the close of the most recently completed assessment window; it is not updated mid-vote and is not adjusted or summarised by the Administrator.

A person proposing an amendment to a financial institution that directly affects the valuation and taxation of the assets they hold has a financial interest in the outcome. Making that interest visible at the moment the proposal enters the public record does not prevent the proposal from proceeding, does not add a procedural hurdle, and does not require any body to assess whether the interest is large enough to constitute a conflict. It ensures that everyone evaluating the proposal — including DR members deciding whether it warrants a seat-burn challenge — can see the proposer’s position in the same view as the proposal itself.

The disclosure is automatic and requires no action from the proposing member. It cannot be delayed, redacted, or characterised by the Administrator. A proposing member whose register position has changed materially since their last assessment window will have a snapshot that reflects the position as of the last completed window rather than the current position. This is a named limitation: the register’s update cycle governs what is available, and the snapshot is the most recent authenticated record.

For FS proposers the same logic applies, but the condition differs. An FS member who holds a Public Valuation Register position is subject to the same automatic disclosure on the same terms as a TP proposer. An FS member who holds no register position has nothing materially comparable to disclose: a disclosure requirement in the absence of a register entry would produce an empty or misleading snapshot. Voluntary disclosure by FS members without a register position remains available through any channel they choose.

The disclosure attaches to the proposal record permanently. If the proposal is later amended, the disclosure from the original submission date remains in the record alongside any subsequent snapshots the amendment process generates. A chain of amendments is a chain of dated snapshots.

F.3 Diffuse Citizens: Visibility of Foregone Benefit

The Olson problem recurs at the cost layer for diffuse populations in the same form it recurs everywhere else they appear in governance design: the individual cost of any single governance decision is spread across too large a population for any individual to have a rational incentive to monitor or resist it, even when the aggregate cost is significant. No same-instant, proportional cost mechanism exists for this actor type. The architecture acknowledges this directly.

The structural analogue available here is ballot linkage: a proposal to reduce, redirect, or weaken the Sovereign Wealth Fund’s obligations to labour tax relief is placed on the same ballot, at the same moment, as the next scheduled labour-tax-relief distribution figure that the proposal would affect. The cost to diffuse citizens is not hidden on a separate future occasion; it is visible, in the same act, as a foregone benefit the voter can see before they vote. This converts an invisible future harm into a present visible trade-off without requiring anyone to judge whether the harm is large enough to constitute a conflict.

The linkage itself is structural, not discretionary. The Governing Council may determine how the foregone-benefit figure is calculated, what rounding or presentation conventions apply, and what accompanying context is provided. It may not determine whether the linkage fires, suppress the foregone-benefit figure when it is inconvenient, or present the two pieces of information on separate ballots at separate times. The linkage fires automatically as a condition of the proposal entering the queue, on the same terms as the Register disclosure in (GOV.B §F.2).

The calibration work the Governing Council must do at Phase One is specifying how the foregone-benefit figure is computed. The figure should represent the expected change in the next scheduled labour-tax-relief payment attributable specifically to the proposal under vote, expressed in terms legible to a general population rather than in actuarial language.

F.4 Future Citizens: Solvency-Ratio Collapse of the Future-Generations Interest

The architecture collapses the future-generations interest into the SWF’s present, mechanically computed solvency ratio. A rule change projected to reduce future solvency capacity triggers the automatic-consequence chain specified in (GOV.B §E.1) immediately, using a number the system already tracks for unrelated actuarial reasons. No new instrument is required. No party is required to judge whether the projected reduction is serious enough to warrant a response; the solvency ratio projection is a mechanical output of the proposed change’s parameters applied to the fund’s current position.

The acknowledged limitation is stated in (GOV §6.3) and is not repeated here: this mechanism covers the financial slice of the future-generations interest, not non-solvency institutional drift that would not move the actuarial ratio. That residual is addressed as an irreducible sub-form of governance decay in (GOV.A §E).

F.5 The Visibility/Cost Distinction: Why Both Axes Are Required

Cost mechanisms make an act expensive. Visibility mechanisms make an act legible without making it more expensive. The two axes are not substitutes: a chamber that bears a vote-share rebalancing cost has paid something real regardless of whether anyone notices; a public register disclosure that nobody reads has created a legible record regardless of whether it deterred anything.

The mapping across actor types: for TP and FS (patient wealth with a long-horizon governance interest) the cost axis is vote-share rebalancing (GOV.B §F.1); full arithmetic in (GOV.B §D) and the visibility axis is the Public Valuation Register disclosure (GOV.B §F.2), which makes the financial stake in a structural proposal legible at the moment it enters the public record. For diffuse citizens, no same-instant cost mechanism is available; the visibility axis operates through ballot linkage of the foregone benefit (GOV.B §F.3). For future citizens, both axes collapse into the solvency ratio: the projected solvency impact is the cost (triggering (GOV.B §D) consequences automatically) and the published calculation is the visibility mechanism. The public register layers across all actor types are specified in (GOV §5.3) and are not repeated here.

The visibility axis serves a function the cost axis cannot: it creates the record that makes post-capture reconstruction possible. A rebalancing cost paid and absorbed leaves a trace in the vote-share history; a Register disclosure made and ignored leaves a trace in the permanent record. Both traces are available to any future legitimate effort trying to establish what happened and when.

G. The Route D Auction Process in Full

The structural rationale for the auction mechanism is in (GOV §6.1) and (VAL §11). This appendix specifies the operational sequence for all three Route D auction pathways.

The corrective auction (GOV.B §G.1) to (GOV.B §G.5) fires following corroborated Valuation Body consensus that a declared value is an egregious statistical outlier. The taxpayer does not initiate. It operates against both under-declaration and over-declaration, with distinct tax treatment in each direction.

The voluntary hard-reset auction (GOV.B §G.7) is initiated by the taxpayer without Valuation Body involvement. The full symmetric refund mechanism applies to downward discoveries.

The inheritance auction (GOV.B §G.8) fires automatically on transfer at death. The symmetric refund mechanism applies in full; the corrective no-refund rule does not import into this pathway.

Sections (GOV.B §G.1) through (GOV.B §G.6) cover the corrective auction in full. (GOV.B §G.7) and (GOV.B §G.8) cover the voluntary and inheritance pathways respectively.

G.1 Sealed-Estimate Protocol: Sequencing and the Non-Anchoring Requirement

The sealed-estimate protocol begins the moment a flagging Valuation Body raises an outlier flag. From that point the sequence is fixed and may not be varied by any party, including the Administrator or the Custodian.

Step one: the flagging body submits its flag to the Administrator through the internal communications system. The flag record contains the flagging body’s identity, the asset identifier, the taxpayer’s declared value, the flagging body’s own independent estimate, and the gap ratio between the two. The flagging body’s estimate is sealed from this point: it is recorded in the permanent log but is not disclosed to the other two Valuation Bodies at any stage. The flagging body’s role in the specific matter ends at submission.

Step two: the Administrator assigns the flagged asset independently to the other two Valuation Bodies simultaneously, without disclosing which body raised the original flag or what gap ratio triggered it. Each body receives only the asset identifier, the taxpayer’s declared value, and the instruction to produce an independent estimate. Neither body is told that a flag has been raised; they are assigned what presents as a routine valuation case. This is the non-anchoring requirement in operational form: a body that knows it is reviewing a flagged asset, and that the flagging body found a gap large enough to trigger review, has been given directional information before forming its own judgment.

The taxpayer is not notified that a flag has been raised, that the asset has been assigned to the two non-flagging bodies, or that an estimation period is underway. Notification occurs only when the Administrator publishes the auction notice following confirmed corroboration. Notifying earlier would allow a taxpayer to initiate a voluntary soft or hard basis reset before sealed estimates are submitted, defeating the corrective mechanism.

Once both non-flagging bodies have submitted their sealed estimates, the position is locked. No subsequent soft basis reset, hard basis reset, or voluntary settlement affects the recognised basis for that assessment cycle. The corrective auction runs to conclusion regardless of any subsequent taxpayer action. The lock applies from the moment of sealed estimate submission, not from publication of the auction notice.

Step three: each assigned body produces its estimate independently and submits it to the Administrator in a sealed envelope through the internal communications system. Submissions are timestamped on receipt. Neither body may communicate with the other during the estimation period, and neither may request information about the other’s progress or submission status from the Administrator. The estimation period closes when both submissions are received, or when a maximum estimation window has elapsed without both submissions arriving, in which case the Administrator records a procedural failure event and the flag lapses without consequence to the taxpayer. The maximum estimation window is a Phase One calibration parameter.

Step four: the Administrator opens both sealed submissions simultaneously and publishes the two estimates alongside the flagging body’s original estimate to all three Valuation Bodies and to the permanent record at the same instant. Simultaneous publication is the operational definition of “opened simultaneously” in (GOV.B §G.2): no body sees the other’s estimate before both are in the permanent record.

G.2 The Unanimity Requirement: Why Majority Agreement Is Insufficient

The auction fires if and only if both non-flagging bodies find, independently and without having seen each other’s estimate before submission, that the gap between the taxpayer’s declared value and their own estimate exceeds the trigger threshold. One of two finding against the declaration is insufficient. The flagging body’s estimate is excluded from the determination entirely.

After step four, the Administrator applies a mechanical test. It computes the gap ratio between the declared value and each non-flagging body’s estimate separately. If both gap ratios exceed the trigger threshold, the auction notice is published. If either gap ratio falls below the threshold, the flag does not result in an auction; the flag event is recorded in the permanent log but the taxpayer faces no further consequence from this review cycle.

The trigger threshold is a Phase One calibration parameter subject to two constraints: high enough that honest professional disagreement within the legitimate valuation range of a non-fungible asset does not routinely produce corroboration (the mechanism is designed to catch egregious understatement, not to adjudicate close professional calls); low enough that an understated declaration at a scale that permanently distorts the delta base is reliably caught.

The median-of-three alternative was considered and rejected in (GOV.B §G.2). The operational reason, beyond the self-referential-power argument made there, is that a median calculation requires the flagging body’s estimate to be disclosed to the other two bodies before they finalise their own, which reintroduces anchoring through the back of the calculation even if the intent is to remove it from the front.

G.3 Auction Conduct: Notice, Marketing Period, and Bidding Rules

When both non-flagging bodies corroborate the flag, the Administrator publishes an auction notice containing: the asset identifier and a description sufficient to identify the asset to prospective bidders without disclosing information the taxpayer has a legitimate privacy interest in withholding; the opening price (the taxpayer’s own declared value with no adjustment); the mandatory marketing period; and the Administrator’s contact channel for bid submission.

The mandatory marketing period is a Phase One calibration parameter with a floor constraint: long enough to allow an interested third party to identify the opportunity, conduct their own assessment, arrange financing if required, and submit a bid.

Third parties only may bid. The taxpayer does not participate in the bidding process. At the close of the marketing period, the Administrator identifies the highest valid third-party bid and notifies the taxpayer, who holds a right of first refusal within a first-refusal window (a Phase One calibration parameter).

Under-declaration (P > B). The taxpayer may sell to the highest bidder at P or retain. On retention, P becomes the new recognised basis and WDT is charged on the upward delta (P − B) at the applicable marginal rate in the auction year. On sale, the proceeds are cash; the delta calculation runs identically. Administrative fees are charged to the taxpayer in both cases.

Over-declaration (P < B). The taxpayer may sell to the highest bidder at P or retain. On retention, P becomes the new recognised basis. No refund is generated by the downward correction. Historical WDT paid under the prior declared basis is not retrospectively recalculated. On sale, proceeds are cash at P; no refund arises from the difference between prior declared basis and sale price. Administrative fees are charged to the taxpayer in both cases.

The no-refund rule on corrective over-declaration is a basis correction, not a penalty. A taxpayer who genuinely believes their asset has declined in value has the voluntary hard-reset pathway available at any time before the corrective process locks.

No-bid outcome. Where the auction attracts no valid bid, the asset is worthless. A public auction open to any willing buyer that attracts zero bids is price discovery. The basis resets to zero. No professional valuation fallback applies. The no-refund rule applies on corrective over-declaration; on corrective under-declaration with a zero-basis reset, ordinary delta mechanics apply from zero. The no-bid outcome is published in the permanent record. No punitive consequence attaches to the Valuation Bodies for a no-bid result.

Where the auction produces tied highest bids, the Administrator records the tie and the Custodian conducts a sealed second round between tied bidders only. If the tie persists, the Custodian selects by lot. First refusal runs against the lot-selected bid. This is the one point where the Custodian exercises discretion; it is logged as a dated event.

G.4 Basis-Reset Documentation and the Assessment-Year Delta Calculation

When the auction closes, the highest third-party bid price becomes the new recognised basis for the asset from the auction year forward. The Administrator produces a basis-reset record containing: the asset identifier; the original declared value; the highest third-party bid price; the outcome (taxpayer retention via first refusal, or third-party acquisition); the auction date; and the resulting new basis. The basis-reset record enters the permanent log and is transmitted to the tax authority as the authoritative update to the taxpayer’s assessment record.

Where the corrective auction establishes P < B (over-declaration), the basis-reset record contains the same fields but the delta calculation produces no tax liability and no refund entitlement. The record explicitly notes the downward correction as a basis correction under the corrective pathway, distinguishing it from a voluntary hard-reset downward discovery, which does generate a refund entitlement. Where the no-bid outcome applies, the record logs the auction price as zero. The Administrator transmits the zero-basis reset to the tax authority regardless of the prior declared value.

The assessment-year delta calculation follows the standard delta mechanics. In both the retention and transfer cases, the basis-reset price is the highest third-party bid. Where the taxpayer retained the asset via first refusal, their net worth at the close of the auction year includes the asset at the new basis; the delta is the difference between the highest third-party bid price and the previously declared value, and no cash changes hands. Where a third party acquired the asset, the taxpayer’s net worth includes the cash proceeds of the sale; the delta is again the difference between the highest third-party bid price and the previously declared value. In both cases the delta calculation is the same arithmetic applied to different net-worth compositions; no special assessment rule is required.

The lump-sum nature of this correction is a named feature. A taxpayer who understated an asset’s entry basis for a sustained period has deferred the tax on a growing gap between the declared basis and the asset’s true value. The auction collects that deferred liability in a single assessment year at full marginal rates, which at the progressive rate structure applicable to large concentrated positions is likely to produce a higher effective rate than annual collection would have generated. This is consistent with the mechanism’s deterrent logic: the expected cost of understatement, once discovered, exceeds the expected benefit of deferral.

The Custodian holds administrative execution of the basis-reset documentation step, confirming that the basis-reset record has been transmitted to the tax authority, that auction proceeds have been transferred to the taxpayer in full where a third party acquired the asset, and that all bond or escrow arrangements related to the auction have been released.

G.5 Published Record: Flag Events, Corroboration Rates, and Drift Visibility

The permanent published record for the auction mechanism has three layers, each with a different disclosure scope.

The first layer is published immediately on the event that generates it, with no delay and no discretion: the flag event (flagging body identity, asset class, and the fact that a flag was raised, but not the declared value or the flagging body’s estimate); the corroboration outcome (unanimous corroboration, one-body non-corroboration, or procedural failure); and where corroboration occurred, the auction outcome (third-party acquisition, taxpayer retention via first refusal, or no-bid lapse). Individual declared values and individual body estimates are not published at any stage. Flag events are published without reference to direction; whether the flag concerns a potential under-declaration or over-declaration is not disclosed at the flag stage. The corroboration outcome record notes direction only after corroboration is confirmed and the auction notice is published.

The second layer is the aggregate statistical record, published on the same annual cycle as the assessment day: the total number of flags raised by each Valuation Body in the period; the corroboration rate for each flagging body; the divergence rate for each body on routine assignments; and the auction outcome distribution across the period. These statistics are computed by the Administrator from the event-level records and published as mandatory outputs. The statistics are unfabricable: any body wishing to game its corroboration rate or divergence rate would have to change its actual valuation behaviour rather than its reported behaviour. The record is a byproduct of the mechanism rather than a self-report.

The third layer is the full event-level record, accessible to any chamber at any time through the Administrator’s internal access channel. This layer includes the individual flag records with the flagging body’s sealed estimate, which remains sealed for public purposes but is accessible to chambers for oversight. A chamber investigating whether a Valuation Body is flagging strategically has access to the full flag history including the flagging body’s own estimates. The chamber’s own review of this record is itself logged as a dated event.

G.6 Administrative Fee Schedule: Cost Recovery Without Penalty Calibration

Administrative fees are charged to the taxpayer whose undervaluation triggered the auction, covering the cost of the auction process itself. The fees recover the costs incurred by the Administrator (publishing the auction notice, managing the bidding channel, and producing the basis-reset documentation) and the costs incurred by the Custodian (administering the auction process and executing the basis-reset). They are not calibrated as a penalty and are not scaled to the size of the valuation gap, the winning bid price, or the delta generated in the auction year.

The Governing Council sets the fee schedule at Phase One. Three constraints any valid schedule must satisfy: fees must not exceed the actual administrative cost of the process, computed on a cost-recovery rather than a profit basis; fees must be expressed as a fixed schedule rather than as a proportion of the asset value or the delta, since a proportional fee is a penalty instrument by another name; and the fee schedule must be published in advance of any auction. A taxpayer entering an auction must be able to determine their maximum fee exposure before the marketing period opens.

The deterrent function of the auction mechanism rests entirely on the threat of market-price discovery at the declared value. A fee schedule large enough to deter participation by third parties would undermine the mechanism’s credibility. The administrative fee is cost recovery; the deterrent is the auction itself.

G.7 Voluntary Hard-Reset Auction

A taxpayer may request a voluntary hard-reset auction at any time during the holding period without Valuation Body involvement. The taxpayer applies through the Administrator, which manages the auction using the same mechanics as the corrective pathway: the asset is offered at the most recent recognised declared basis as the opening price, the mandatory marketing period applies, third parties bid, and the taxpayer holds a right of first refusal at the highest third-party bid price.

Upward discovery (P > B). The taxpayer may sell at P or retain with P as the new recognised basis. WDT on the upward delta applies in the normal way.

Downward discovery (P < B). The taxpayer may sell at P or retain with P as the new recognised basis. The downward delta generates a refund entitlement under the normal symmetric mechanism, subject to the lifetime contribution envelope. The corrective no-refund rule does not apply.

No-bid outcome. The asset is worthless. The basis resets to zero. The symmetric refund mechanism applies to the full downward delta from prior declared basis to zero, subject to the lifetime contribution envelope.

Auction costs are borne by the taxpayer. Administrative fees apply on the same cost-recovery basis as the corrective pathway. The voluntary hard-reset is recorded in the permanent log as a taxpayer-initiated auction event; it does not generate a published flag event.

The lock-point rule applies in one direction: a voluntary hard-reset initiated before two non-flagging Valuation Bodies have submitted sealed estimates in a corrective process is valid and closes the corrective process. Once sealed estimates have been submitted, the voluntary pathway is unavailable for that assessment cycle.

G.8 Inheritance Auction

The inheritance auction fires automatically when a Route D asset passes to an heir. No taxpayer election, no Valuation Body consensus, and no Administrator discretion is required; the transfer event is the trigger. The auction uses the same mechanics as the other pathways: the asset is offered at the most recent recognised declared basis as the opening price, any willing buyer may bid, and the estate holds the right to retain at the highest third-party bid price.

Upward discovery (P > B). The estate pays WDT on the upward delta in the normal way. The heir’s WDT entry basis is P.

Downward discovery (P < B). The estate receives a refund entitlement on the downward delta under the symmetric mechanism, subject to the lifetime contribution envelope. The corrective no-refund rule does not import into the inheritance pathway; the inheritance auction is price discovery at a forced transfer event, not a correction of an egregious declaration. The refund flows into estate administration; the heir may receive a portion through ordinary succession, slightly increasing their opening liquidity without affecting their WDT entry basis, which remains P.

No-bid outcome. The asset has no market value. A minimum professional valuation may be required as a fallback where no observable market exists and the basis requires establishing for succession purposes; this is assigned to (JUR §4.2). Where the asset has genuinely collapsed in value, the symmetric refund logic addresses the loss, subject to the lifetime contribution envelope.

Conduct rules, timeline, and the estate’s retention right follow the §G.3 mechanics applied to the inheritance trigger. UK-specific implementation questions, including international asset treatment and auction conduct rules at death, are assigned to (JUR §4.2) and (JUR §4.3).

H. The Corporate Equity Settlement Facility: Mandate Extension

H.1 Purpose and Relationship to CORP

The corporate equity settlement facility is designed and specified in (CORP §6). This appendix identifies the governance decisions the facility requires, names the mandate extensions the SWF Custodian must carry, and records the Governing Council calibration parameters the facility introduces. The facility is an option, not a requirement. The governance question is not whether to make it available — that is settled in CORP — but what institutional conditions must be satisfied for it to operate safely alongside the SWF’s existing mandate without silently expanding the Custodian’s risk exposure or distorting its investment posture.

H.2 New Exposure Categories in the Custodian’s Mandate

The facility introduces two exposure categories outside the Custodian’s existing mandate that must be named explicitly in any mandate extension.

The first is secured lending to listed companies. The Custodian currently manages SWF assets in a manner consistent with long-term solvency, invested primarily in a low-correlation portfolio. Issuing loans secured against listed equity creates a credit exposure to individual listed companies, a repayment dependency on corporate cash generation timelines, and a collateral management obligation that does not exist under the current mandate. The mandate extension must name secured corporate lending as a permitted activity, specify the conditions under which the Custodian may enter into facility loans, and establish the margin call mechanics and mandatory sale process as named obligations rather than discretionary responses.

The second is a distinct corporate equity portfolio. Shares transferred through the facility are held as collateral, not as investment assets. They must not be commingled with the SRR’s low-correlation portfolio, the Route C individual equity positions, or any other named SWF portfolio. The mandate extension must establish the corporate equity portfolio as a named and separately accounted exposure category, with its own risk parameters, its own solvency treatment, and its own reporting line in the annual stewardship statement. The solvency floor calculation must aggregate the corporate equity portfolio’s net exposure (outstanding loans minus current collateral value) alongside the refund liability, the bridging facility commitments, and operating costs. A corporate equity portfolio whose collateral has declined materially below the outstanding loan book is a solvency exposure, not merely an investment fluctuation, and the floor must treat it as such.

H.3 Stewardship Statement Requirements

The annual stewardship statement under (GOV.B §E.5) must include a dedicated section on the corporate equity portfolio containing: the aggregate loan book outstanding at the assessment date; the aggregate current market value of held shares as collateral; the net exposure (loans minus collateral value); the number and aggregate value of margin calls triggered during the year and how each was resolved; the number and aggregate value of mandatory sales executed during the year on account of maximum holding period expiry; take-up rates across the assessment universe (number of companies using the facility and aggregate levy amounts settled through it); and the Custodian’s assessment of the portfolio’s risk position and its interaction with the SRR solvency floor.

These disclosures are mandatory. The Custodian holds no authority to characterise, delay, or summarise them in lieu of the underlying figures. The rationale for separate disclosure is visibility: the corporate equity portfolio’s risk properties are qualitatively different from the SRR’s low-correlation holdings. An SWF that has accumulated a large corporate equity book in boom conditions without that accumulation being visible to the Governing Council and the public is a Custodian whose mandate drift is not detectable until a market reversal tests the collateral values. Separate reporting makes the accumulation visible in real time.

H.4 Relationship to Existing Mandate Architecture

The corporate equity facility follows the structural pattern of the inflationary rotation mandate established in (GOV.B §E.7): a named extension of the Custodian’s existing mandate, specified through parameters set in advance by the Governing Council, operating automatically when trigger conditions are met rather than at the Custodian’s discretion. The Custodian does not decide whether to accept a facility application from a qualifying listed company; once a company elects the facility and the conditions are met, the loan is issued and the shares are transferred as a mandatory consequence of the mandate. The Custodian’s discretion operates within the parameter space — margin call responses, collateral assessment, mandatory sale timing within the maximum holding period — not over whether the facility operates.

This extension pattern preserves the pre-crisis commitment property that the stewardship statement cycle secures for other mandate elements: the facility’s conditions, parameters, and the Custodian’s obligations are committed in the mandate instrument and published in successive stewardship statements before any company uses the facility. The Custodian cannot improvise its approach at the moment of high demand without a visible departure from prior stated commitments appearing in the permanent record.

The corporate equity facility does not interact with the bridging facility for individual taxpayers (GOV.B §E.3). The bridging facility manages the timing mismatch between an individual taxpayer’s physical departure and the settlement of their personal WDT position. The corporate equity facility manages the timing mismatch between a listed company’s assessment-date levy obligation and its cash generation cycle. They share structural logic — both decouple an obligation from its settlement — but are operationally separate, held in separate portfolios, and calibrated against separate observable inputs.

H.5 Governing Council Calibration Parameters

The following parameters are Governing Council decisions under the Tier 1 process, informed by Phase One take-up data and the Custodian’s stewardship statement reporting.

The pre-assessment volume-weighted average window, which determines the transfer price at which shares move to the SWF and against which the loan amount is set. A shorter window tracks recent price more closely but is more susceptible to short-term price manipulation around the assessment date; a longer window smooths this risk at the cost of a transfer price that may diverge materially from the assessment-date market price.

The loan interest rate, which must reflect the Custodian’s cost of capital and the credit exposure to the borrowing company, without being punitive in a way that defeats the facility’s purpose. A rate calibrated to government borrowing cost plus a modest credit margin is the natural anchor.

The minimum annual repayment schedule, which prevents loans from remaining outstanding indefinitely. The schedule must be long enough to accommodate the realistic cash generation timeline of growth-stage companies but short enough that the facility does not become a permanent financing arrangement.

The margin call threshold as a percentage of the outstanding loan, which governs when the Custodian may require additional collateral, partial cash repayment, or execute a partial sale. A threshold set too low generates frequent margin calls that disrupt corporate operations; a threshold set too high leaves the Custodian inadequately secured through prolonged market downturns.

The maximum holding period before mandatory sale, which prevents the SWF from accumulating permanent strategic equity stakes in individual companies. It must be long enough to accommodate the realistic cash generation timeline of the companies the facility is designed to serve, but short enough that the SWF’s corporate equity exposure is self-liquidating rather than open-ended.

All five parameters are named in the Custodian’s mandate instrument and published in the first annual stewardship statement before any company uses the facility. Subsequent revisions follow the (GOV.B §E.2) commitment discipline: any change to published parameters is explicitly identified in the next stewardship statement alongside its rationale, so that the revision is a dated, attributable, and publicly visible event.

These five parameters should be understood alongside the \(\tau_h\) ramp parameters derived in (CORP.A §B.2.8), which determine the pace at which listed companies migrate from individual WDT assessment to full corporate delta levy treatment. The \(\tau_h\) ramp parameters are Tier 1 Governing Council items that interact with the corporate equity facility parameters: a faster \(\tau_h\) ramp accelerates the population of companies that become eligible for the facility, while a slower ramp extends the period during which individual-level assessment applies. The two parameter sets should be calibrated jointly rather than in isolation, using Phase One data on corporate take-up rates and the Custodian’s assessment of the corporate equity portfolio’s risk profile.