Burnhams Tax on Cash ISAS and Death tax

So does the state own all money? Thus those who have amassed more are either greedy or hard working and prudent?

Madgran77

*Because if the state didn’t issue any money (commonly but inaccurately known as printing money) we would very shortly end up with very little money at all in the country to be shared among a perpetually growing population. Where did you think money comes from?*

I misunderstood your point - thought you were referring to benefits when you said "state issued money"!

I wont grace your somewhat patronising question with an answer!

Had you specifically mentioned benefits I would have responded differently.

I do find it disconcerting, though, that ‘benefits’ is the first thing that springs to mind with regard to the state issuing money.

LemonJam

All care homes are regulated by the Care Quality Commission- against exactly the same standards- both Local Authority and private care homes.

Having conducted a care home review some years ago in my county its a myth that expensive care homes, purpose built, lovely carpets etc perform better against CQC standards than cheaper options- in fact sometimes worse.

Google Winterbourne View, 2006 purpose built, private care facility for adults with Learning Disabilities, near Bristol. It became the centre of an abuse scandal exposed by a BBC Panorama programme. Parents visited downstairs in communal areas and abuse happened upstairs and behind the scenes. The footage of the under cover BBC journalist is horrendous. Panorama has exposed many similar cases of abuse care homes for the elderly where there were self funding patients.

The answer is good regulation of health and social care services, regular periodic inspection and holding to account with improvement plans where improvements are required. .

I can vouch for the fact that the care s the same, across the board.
It may be carried out in more luxurious surroundings, but if the staff is like that at the home mentioned, that's the standard of "care" people can expect.

The state certainly controls the money, or at least tries to, what isnt collected in taxes, has to be borrowed or created with QE, anything "created" is counted as borrowing by lenders
The current position is that we are borrowing close to 100% of GDP those that lend us money, are content at present, they are busy short selling the Yen, let's hope they dont turn on the UK in the autumn, it could get very difficult.

Burnham has continued Starmers policy of not borrowing more and is proposing to increase taxes to increase public spending. He has been very careful to send all the right signals to the finance markets, that is likely to remain until parliament returns in the autumn. Then it depends what actually changes and "IF" his own MPs back the plan, there will be plenty of speculation leading up to the budget, we will see how long the honeymoon lasts.

Because if the state didn’t issue any money (commonly but inaccurately known as printing money) we would very shortly end up with very little money at all in the country to be shared among a perpetually growing population. Where did you think money comes from?

I misunderstood your point - thought you were referring to benefits when you said "state issued money"!

I wont grace your somewhat patronising question with an answer!

What ever taxation system is introduced there are always concessions and exemptions, I think it would be reasonable for residential care costs to be a concession - you have already paid into the system and don't need to pay twice.

Madgran77

*The state spends and then taxes back much of what it spends. We need state issued money. Everyone, rich and poor need it*

I dont understand! Why does everyone need state issued money ?..

Because if the state didn’t issue any money (commonly but inaccurately known as printing money) we would very shortly end up with very little money at all in the country to be shared among a perpetually growing population.

Where did you think money comes from?

Let’s hope he starts taxing the big businesses like amazon

The state spends and then taxes back much of what it spends. We need state issued money. Everyone, rich and poor need it

I dont understand! Why does everyone need state issued money ?..

Oldnproud

Aveline

Just imagine what the state care would be like!! I'm not optimistic. Probably prefer to pay my own way (which is most likely what will happen given likely timelines)

Right now, my mum is in a home where a lot of the residents are probably state funded.

She is self funding.

There is no noticable difference in the care given to anyone (though I suspect that residents who have regular visits from close relatives might fare slightly better than those who don't) and I doubt that the carers are privy to the financial side of things anyway.

Sadly, it seems to be pretty unpleasant either way!

Exactly- this will be the case in the majority of care homes across the UK.

Oldnproud

Aveline

Just imagine what the state care would be like!! I'm not optimistic. Probably prefer to pay my own way (which is most likely what will happen given likely timelines)

Right now, my mum is in a home where a lot of the residents are probably state funded.

She is self funding.

There is no noticable difference in the care given to anyone (though I suspect that residents who have regular visits from close relatives might fare slightly better than those who don't) and I doubt that the carers are privy to the financial side of things anyway.

Sadly, it seems to be pretty unpleasant either way!

Same here, Oldnproud. My relative is self funding, and many of the people in her home are not. She knows this as they, or their visitors have told her. I don't know why, but there's not much to talk about in there, and sometimes people talk about having to 'top up', which means paying for extras not covered by the LA, or about how pension credit has been affected.

The care is rightly the same for all, and I agree that the carers will only be able to differentiate if the patients tell them. We looked at a range of homes on her behalf (she wanted to go into care) and all of them take LA funded residents. We weren't looking specifically for one that didn't, but even if we had been there are none in the area.

It has crossed my mind that I wonder how a new system might pan out for those like my mum who have already been self -funding for a length of time - would they be hit by a double-whammy, where they have already paid out around £8,000 per month for their care from modest savings/sale of their home, but still have a chunk of their remaining funds taken in tax if this is introduced before they die?

But at the end of the day, it will still 'have been 'their' money, not their children's, and as long as the very rich are not seen to be able to dodge this, I would not be complaining too much.

Alittlemadam

I don’t see why as a working person who is fortunate to be able to save should have to pay either a 1.8% in tax each month or even 10% on my saving when I die when I have already been taxed.

Perhaps those people who sit on there bottoms and don’t pay anything into the system should contribute also why should I have to pay for them. Makes me so angryb

I understand what you're saying - it's not fair - but if someone has no money they can't pay, and if the care system took people's last penny that would affect those who have managed to save a nest egg. If everyone has to pay 10%, it is surely better than taking the savings of those who have them to pay for those who haven't saved. I think a 'death tax' is fairer than the current system where some pay 100% of their assets and others nothing.

There will always be those who play the system, and there's not a lot we can do about that, as when they get old and in need of care we can't turn them away from care homes, any more than we can deny people health care or other advantages. A 'death tax', whether it is on couples or individuals, will mean that we can all access care if we need it, and those with savings can keep a large percentage of them to pass on. Also, if the tax is on all assets, people can't transfer things like jewellery or artworks to a non-taxpaying spouse to avoid paying.

Aveline

Just imagine what the state care would be like!! I'm not optimistic. Probably prefer to pay my own way (which is most likely what will happen given likely timelines)

Right now, my mum is in a home where a lot of the residents are probably state funded.

She is self funding.

There is no noticable difference in the care given to anyone (though I suspect that residents who have regular visits from close relatives might fare slightly better than those who don't) and I doubt that the carers are privy to the financial side of things anyway.

Sadly, it seems to be pretty unpleasant either way!

I don’t see why as a working person who is fortunate to be able to save should have to pay either a 1.8% in tax each month or even 10% on my saving when I die when I have already been taxed.

Perhaps those people who sit on there bottoms and don’t pay anything into the system should contribute also why should I have to pay for them. Makes me so angryb

All care homes are regulated by the Care Quality Commission- against exactly the same standards- both Local Authority and private care homes.

Having conducted a care home review some years ago in my county its a myth that expensive care homes, purpose built, lovely carpets etc perform better against CQC standards than cheaper options- in fact sometimes worse.

Google Winterbourne View, 2006 purpose built, private care facility for adults with Learning Disabilities, near Bristol. It became the centre of an abuse scandal exposed by a BBC Panorama programme. Parents visited downstairs in communal areas and abuse happened upstairs and behind the scenes. The footage of the under cover BBC journalist is horrendous. Panorama has exposed many similar cases of abuse care homes for the elderly where there were self funding patients.

The answer is good regulation of health and social care services, regular periodic inspection and holding to account with improvement plans where improvements are required. .

You'd always be able to pay your own way Aveline- just as people can opt for private health care instead of NHS care.

You possibly would be a voluntary self funder in a care home with UK Health and Social Care funded patients paid for the government if these proposals gain traction.

Foxyferret

So if I sell a property for £100,000, the tax will be £10,000? Is that correct?. It’s not going to affect just the rich is it, it’s going to affect a lot of people with lower value properties.

Not correct.

The vaguely hinted at proposal of a so-called " 10 % death tax" would be payable on the estate of a deceased person.
The tax raised would be used to fund residential care in old age for those who need it.

Nothing to do with live people selling property.

A 10 % tax (after death) on all estates would be fairer than the current IHT tax ( paid by less than 20% of estates)

Just imagine what the state care would be like!! I'm not optimistic. Probably prefer to pay my own way (which is most likely what will happen given likely timelines)

Doodledog

Foxyferret

So if I sell a property for £100,000, the tax will be £10,000? Is that correct?. It’s not going to affect just the rich is it, it’s going to affect a lot of people with lower value properties.

We don't know for sure, but that is the assumption, yes. The difference is that if you go into care now, your £100k will last about 15 months before you have nothing left above the limit of £23k. Under this proposal, if it is as has been mooted, you will be left with £90k to pass down. Is that not better?

As Doodledog rightly says- we don't know for sure yet.

You wouldn't be selling your property yourself foxyferret when you're dead. It would be sold following probate and proceeds go to whoever you name in your will after such a proposed tax is paid of such a policy was implemented.

I agree- much better for you to pass £90k down than have to sell your property when alive, on admission to care home to pay for fees. £10k may only last between 5 to 7 weeks on average that way depending on fees in that home. Under this proposal the state would pay the care fees, free at point of need.

GrannyGravy13

Graphite what percentage of the U.K. has £300,000 in ISA’s?

More than you might think. ISA holders aged over 65, hold an average of £64K.

www.theinvestorscentre.co.uk/investing/statistics/isa-stats-uk/

"As of 5 April 2023, HMRC data confirmed 5,070 ISA accounts worth £1 million or more — a record high at the time and a 4.5% increase on the 4,850 recorded a year earlier. The total number of ISA millionaires has grown by over 1,000% in seven years.

The top 25 ISA investors hold an average of £11.3 million each in their ISA accounts — all returns and income completely free of UK tax."

Aveline

So we all have nothing except what the govt gives us?

I really don't follow your reasoning.

If people want to provide private provision for themselves they are welcome to. But there is no reason why it cannot provide a quality service for all.

Do people 'drip with resentment'? Or do they just want to see a system where everyone pays something? Not full fees, not equal contributions to an insurance scheme, but something?

The alternative is that some get a free ride - not working and producing anything, not paying tax and then getting the perks of living in a welfare state for no contribution.

If we all pay something, then those such as in the example suggested by Foxyferret above will still have something at end of life, rather than being wiped out after a lifetime that has resulted in an estate of £100k being reduced to £14k, when someone in a similar house in a different part of the country pays the same fees and is left with tens of thousands, and someone else gets the same care with no input at all.

I don't 'drip with resentment', but I think that is unfair, and a small contribution from everyone is a fairer system. The hyperbolic language doesn't strengthen your argument- I could claim to think that people 'chuckle with glee' at not having to pay anything, but that wouldn't be true, either.

So we all have nothing except what the govt gives us?

And if we all stopped believing that we have somehow paid through our taxes for a 'free' service provided by the state we might get rid of this feeling of deep unfairness...

The state spends and then taxes back much of what it spends. We need state issued money. Everyone, rich and poor need it.