The Proposed 10% ‘DEATH TAX’
Funding for care in later life is something that affects all of us, especially when we do not know whether we are going to need it ourselves or not. There is no denying that care has to be paid for, but who should be responsible, should it be the individual, the family of the individual or the government through local authority funding?
Most people would argue that if they had worked all of their adult life and had paid National Insurance or ‘a full stamp’, then this should cover health and care needs in the future. Unfortunately, this is not the case and there is a huge deficit in funds needed to cover care costs.
The health secretary, Andy Burnham has released information about the Labour party’s proposed plans to introduce a 10% ‘death tax levy’ to help fund ‘elderly care’. This is one of three options to raise money, the other two being, a means tested amount to be paid for the duration of retirement, and, the option of deferring pensions for three years to pay into a new ‘National Care Service’.
If the new 10% ‘death tax’ were to be introduced it is likely to affect about 17 million families with estates worth £500,000 or more. This tax would be on top of Inheritance Tax where a 40% tax would already apply on estates over £325,000.
Whether this proposal or any other is brought into being or not, LCS is happy to advise clients about the implications relating to their individual circumstances. We are finding generally that deceased’s estates are becoming more complex and it is paramount that our clients consult with us to ensure that everything is done properly and appropriately.
