Burnhams Tax on Cash ISAS and Death tax

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)

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)

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.

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 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

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!

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.

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.

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.

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.

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 ?..

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

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?

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.

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!

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.

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.

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.

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

*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.*

Didn't mention benefits specifically as I had quoted your comment. I think my brain went to "benefits" because of earlier references in the thread to universal credit and pension credits ...I think in a response to a comment you made. My mistake though. I do fully understand re wider context of state issued money.

Anyone heard what - if anything- came out if the cross party talks?

Whitewavemark2

Anyone heard what - if anything- came out if the cross party talks?

Labour has a large majority and can do whatever the want
BUT
Government continues regardless of the party in power, taxes are increased or decreased according to policy at the time but major changes in taxation structure or new taxes need to be agreed if possible

If Wealth Tax or new IHT is introduced a great deal of effort and cost is going to be needed to set the structure up, if the opposition state they would abolish if they get power, other ways of raising revenue are considered

Other parties that attended the cross party talks haven't chosen to make any comments on what was discussed either.

AB is now on holiday and parliament in recess- so perhaps we wont hear more detail for a while...

I don’t know why the change in tax on cash held in stocks and shares ISAs is being referred to as Burnham’s tax, it was brought in by Rachel Reeves. The Chancellor hasn’t had a budget yet so any mention of the ‘Death Tax’ is pure speculation.

Oldnproud

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.

I wondered about that, it does seem unfair, hopefully this will be considered.