Tories attack Labour over ‘death tax’

Labour plans for local taxation could end up in a ‘sinister death tax’
charged to the estates of those unable to pay their council tax bills, the
Tories have claimed.

Shadow local government secretary Caroline Spellman claimed the threat is
contained in government policy documents for Northern Ireland, which could be
applied to England as part of the Lyons review of local government finance.

A statement from her office claimed the idea had been endorsed by former
Blair-ite local government secretary Stephen Byers and was similar to ideas put
forward by a senior Oxford University adviser to the Treasury. These draw on the
practice of deferring property taxation that is used in the United States.

Her estimates, based on Band D dwellings, suggest an elderly couple who used
a facility to defer council tax for 20 years, with interest, until the death of
the survivor, would face an additional £115,000 death duty.

‘Labour’s reform of local government finance is just a gambit by the
government to tax the uplift in property prices since the 1990s,’ said Spellman.
‘Already under Labour the number of households paying inheritance tax has

‘Now pensioners who have worked hard, saved and invested in their homes over
a lifetime are the prime target for Blair’s third-term tax rises. It is a
sinister death tax by another name’.

She said she feared pensioners struggling to pay soaring council tax bills
would be forced to surrender their children’s inheritance.

Liberal Democrat local government spokesperson, Sarah Teather said:
‘Pensioners get a raw deal from the unfair council tax, but saddling grieving
families with massive death taxes is not the answer.

‘Tinkering with council tax is not enough. It must be scrapped and replaced
with a fair system based on ability to pay.’

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