NEWS NOW THE DEAD MUST PAY COUNCIL TAX
Gordon Brown's pay-as-you-die tax bombshell could force people to give up their home on their death
Monday February 22,2010
By Martyn Brown
GORDON Brown will clobber the elderly with a savage pay-as-you-die tax bombshell that could force people to give up their home on their death, it can be revealed today.
Millions of householders will be encouraged to sign away their estate to foot the bill for soaring council tax demands.
Under the scheme ratepayers can defer inflation-busting council tax payments until they die.
Town hall chiefs will then be able claw back the cash, with interest, from the value of their estate. Over 20 years, for a couple with a typical home, that could amount to more than £73,000.
For those also facing Inheritance Tax and Labour’s proposed death tax to fund its planned National Care Service, the levy could almost wipe out any inheritance parents were hoping to leave their children.
But critics last night warned that Mr Brown’s latest tax could force struggling couples into giving up their homes to fend off the bailiffs. The Tories said it puts pensioners under pressure to sign up to pay taxes from their estate because their ever-decreasing pension funds leave them unable to meet rises in council tax introduced by Labour.
Caroline Spelman, the Conservative Shadow Secretary of State for Local Government, said last night: “Gordon Brown has been caught red-handed at planning a barrage of tax rises on pensioners. He has already deprived the elderly of security in retirement through his pension tax hikes. Now he wants a death tax for social care and a pay-as-you-die levy on council tax."
“People who have saved and worked hard all their lives deserve dignity and respect, but Gordon Brown only wants to tax middle Britain from cradle to grave. Conservatives will scrap Labour’s tax hike plans, take more families out of unfair inheritance tax, and freeze council tax to help struggling families and pensioners.”
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Campaigners said raiding estates may prevent people from saving and urged Labour to shelve the plans. The Institute of Revenues Rating & Valuation has warned of a “perception that the ratepayers and their offspring are being robbed of their birthright”.
Matthew Elliott of the Taxpayers’ Alliance said: “The only certain things in life are said to be death and taxes, now the Government is doing its utmost to add a third – death taxes. Ministers and local authorities should focus more on cutting council tax, rather than whacking people even harder.”
Ministers sneaked through new rules before Christmas which allow Britain’s 11million pensioners to put off their council tax bills, using their homes as security. The scheme is to be rolled out first in Northern Ireland after the Rates (Amendment) Act (Northern Ireland) 2009 received the Royal Assent late last year.
The law says that eligibility will be subject to the person being an owner occupier aged 60 or over. Instead of struggling to pay on a pension, the elderly would be able to put off payments until they or their spouse died or they sold their property.
A charge could be placed on the home, putting the town hall in second place to recoup cash after the taxman has taken his 40 per cent inheritance tax on all homes worth more than £325,000. Under Labour, council tax bills have more than doubled, now averaging £726 more than in 1997.
It also emerged last week that Labour has been polling on plans to slap a 10 per cent tax on homes to fund costly social care reforms. The revelation comes as the row over Labour’s death tax escalated.
Health Secretary Andy Burnham hosted a conference with care charities on Friday. The Conservatives, who plan to fund elderly care with a one-off £8,000 payment into an insurance scheme, boycotted the meeting.
In a letter to Mr Brown, Shadow Health Secretary Andrew Lansley said: “The public have a right to know – do you intend to pursue a compulsory insurance levy or not?”
The Department for Communities and Local Government was unavailable for comment.