UK Coalition Mulls ‘Death Tax’

by Amanda Banks, Tax-News.com, London

22 July 2010

The UK coalition government has revealed that it is considering reviving the much-criticised Labour idea to impose a so-called ‘Death Tax’ on the elderly.

Health Secretary Andrew Lansley, who spearheaded a campaign during the general election to attack Labour’s plans, will ask a commission to look at the option of a compulsory levy.

The original idea put forward by Labour was that pensioners would pay a lump sum in the region of GBP20,000, either on retirement or on death, to pay for their care in old age. The Conservative Party criticised the plan when it was first mooted and dubbed it as a ‘death tax’. The Conservatives stated in their own manifesto that a charge of GBP8,000 should be considered.

Critics of such a scheme warn that it is the responsible, middle-class property owners who will be hit most and that thousands may be forced to sell their homes to fund the compulsory payment.

Lansley has apparently asked the commission to report on "how best to meet the costs of care and support as a partnership between individuals and the state." He added that the commission would be "free to propose a compulsory tax" if that was one of the options it considered.

It is estimated that an additional 1.7 million people may potentially fall into the caring needs category within the next 20 years.

Neil Duncan-Jordan of the National Pensioners Convention described the idea as a "betrayal" and that the commission had been set up merely for "political expediency."

Lansley hopes to bring in new legislation within the next year.

Recommended