UK Government Under Fire Over 'Death Tax' Plans

by Robert Lee, Tax-News.com, London

11 February 2010

The Conservative Party, the largest opposition party in the UK parliament, claims that the Labour government is secretly planning a "death tax" to pay for their plans for a National Care Service for the elderly.

According to Shadow Health Secretary Andrew Lansley, government ministers are planning a tax of GBP20,000 per head on the estates of the deceased to fund reform of state care for the elderly.

Philip Hammond, the Shadow Chief Secretary to the Treasury, commented: "When you die, a Labour government would take GBP20,000 from what you leave to your children and family. For those with the most modest savings Labour’s plans could leave them with nothing."

The Conservatives are proposing a system whereby people can opt to pay a one off premium of GBP8,000 into a voluntary scheme to cover the cost of residential care in old age. "So under our plans no-one would be forced to sell their home to pay for care," added Hammond.

The fact that Prime Minister Gordon Brown refused to confirm or deny the rumors about the death tax during a lively House of Commons debate on February 10 has only served to fuel speculation that the government is giving serious consideration to the plans.

"Gordon Brown needs to come clean with the public and say how he will fund his new National Care Service", Lansley said.

However, Health Secretary Andy Burnham was later reported to have said that, while the levy was suggested in a green paper last year, it was not currently on the table as part of the reforms of elderly care.

“I can say to you very categorically that that is not what I am considering," Burnham remarked.

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