The other thing is what happens when the notional value goes down a year later? Do they get a tax refund?

Usually, you get a credit or deduction that can only apply to future tax liability in the same category. Ex: Capital losses are stuck with capital gains in the USA and can only be applied to $3000 of your income per year otherwise. These rule systems are usually incredibly self-serving.

The wealth tax is yearly based on your wealth that year.

At most you'd get a rebate of your future tax payment as is the current practice.

Yes.