Apparently Labour is looking at resurrecting its old plan for a 15% death tax that would be levied on an estate when a person dies. The reason for this death tax – which would be paid on top of the 40% inheritance tax (IHT) charge – is to pay for social care and apparently would strip the average estate of £46,000.
While I don't think that a death tax is a particularly fair way to increase Treasury coffers, as I'm assuming it would be levied on everyone at a flat rate which would hit those with modest estates disproportionately, it is based on a very real concern about how the country will pay for long-term care.
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As a nation we are getting older and one in four old people already need care, the simple truth is that more of us will need long-term care and that care is very costly.
But who will pay for it? The government is introducing a cap on the amount individuals will pay towards their care meaning taxpayers will have to pick up the bill for those costs that aren't covered. And although the government has tried to offset this cost with an IHT freeze – the IHT nil-rate-band will stay a £325,000 until 2019 – the general consensus is the £100 million this will raise won't go far enough to cover the care cap.
The truth is the government we don't know how we are going to pay for a cap on long-term care costs and we need a radical solution to ensure we can provide our most vulnerable elderly people with the care they deserve.
No-one likes tax and least of all one that applies to your entire estate which you've worked your life to build up but the tough choice that needs to be made is would you rather pay a 'death tax' or suffer in a sub-standard care home?
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