Government to freeze IHT threshold to pay for care

by Calum Fuller

More from this author

11 Feb 2013

  • Comments
Culture secretary Jeremy Hunt (Photo - DCMS)

THE INHERITANCE TAX THRESHOLD is to be frozen at £325,000 for individuals and £650,000 for couples until at least 2019 as the government seeks to reform what it describes as the "unfair" cost of social care for the elderly.

It is expected to include a £75,000 cap on the costs people pay for care and a rise in the threshold for means-tested support from £23,250 to £123,000.

Changes to National Insurance and pensions are likely to also contribute to the funding.

The cost of accommodation in residential care homes averages between £7,000 and £10,000 a year, something that the government said forces approximately 40,000 people to sell their homes every year - largely because they face unlimited care costs.

Health secretary Jeremy Hunt (pictured) described the current state of affairs as a "scandal", describing his plans as a "fully-funded solution".

He told the BBC's Andrew Marr Show: "Just as people make provisions for their pensions in their 20s and 30s, so we also need to be a country that prepares for social care as well.

He added: "By setting an upper limit to how much people have to pay, then it makes it possible for insurance companies to offer policies, for people to have options on their pensions, so that anything you have to pay under the cap is covered."

Chief executive of the Taxpayer's Alliance Matthew Sinclair was critical of the proposals, describing them as "picking people's pockets".

He told the Telegraph: "Inheritance tax is a deeply unfair double tax which is levied on assets that will have been paid for by income the taxman has already dipped his fingers into.

"In opposition, the chancellor was critical of his predecessor's love of stealth taxes, it seems like not much has changed in the Treasury since."

Sinclair added that "punishing taxes" were not the answer to the social care problem, and called for spending cuts instead.

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit
  • Send

Manager / Senior Accountant - ACA or ACCA Qualified

WavelengthWavelength - Northampton - c£35K - £42K

 
 
 
 
 
 
 
 

 

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.