To think inheritance tax should pay for social care

[Wouldloveanother]

Just that really. Saw somebody else mention it on here and I think it’s a brilliant idea!

I cannot agree that taxing someone for their work via income tax is not "legalised theft" whereas not taxing them for income they haven't worked for which has come to them through chance of birth from another person, isn't.

As for taxing something that has already been taxed, what are your views on using taxed income to pay ££££ to commute to work in order to a have a job which is taxed?

Exactly this.
And if people are clear that that’s
what it will be used for, there will be increased efforts to ensure the tax burden is removed or at least minimised, resulting in less IHT overall.

@Explaintome so people who find their own care do not pay IT?
Or just those who've needed a charge on their house to pay for care (which already happens for those going into residential but not for care provided at home.
Only those who didnt need to pay for care pay IT?
Or everyone eligible pays IT but those that didn't need to pay for care pay more??

There must be data available that shows what the current IT revenue is and the total amount spent on social care.

They'd still pay tax on what's left (to whatever the threshold is).

The amount of tax paid - on what? - has nothing to do with how much his wife's care cost. Do you think they should be offset? Sadly the reality is that care costs a fortune.

@Explaintome ok so you need to look at how much revenue is raised through inheritance tax, and how much is spent on social care. I imagine there is a huge discrepancy.
And as I said earlier, on many cases someone's IT bill will not cover the cost of their care. As the system is right now, they'd have to sell and use the proceeds from the property sale which of course is going to be a higher amount.
Many people who receive funded home care right now probably won't end up paying a huge amount of IT due to the thresholds, despite the significant increase in house prices.

But how will the people without homes pay for their care?

I cannot agree that taxing someone for their work via income tax is not "legalised theft" whereas not taxing them for income they haven't worked for which has come to them through chance of birth from another person, isn't.

this

IHT tax isn’t particularly difficult to minimize or avoid entirely. I know my parents sorted things out 10/11 years ago in regards to putting their assets into trust funds and signing some over to my brother and I.

It's interesting how people don't mind IHT tax evasion but other ones are frowned upon.

or avoidance, not sure what the right term is

Atm, self-funders' care fees are higher in order to cover the shortfall from those funded by their local authority.

The taxpayer has to pay.

It’s not tax evasion.

It’s tax avoidance.

One is legal and the result of clever planning, one is illegal.

Yes and as I've said, people who can pay would continue to pay and the scheme could only work by substantially increasing the amount of inheritance tax collected by reducing the threshold and increasing the rate. And yes, people would become better at avoiding it, so those loopholes need to be closed too.

It might not be enough to fully solve the issue, but it could definitely be a start. It won't replace the money currently funding care, but add to it.

One is legal and the result of clever planning, one is illegal.

Nonetheless plenty criticise big companies & the global elite for legal tax avoidance

Exactly.

Tax avoidance. They worked within the law. Many, if not most, people subject to higher taxes will minimize what they owe quite legally.

Is this not enough MN? ^^

This. I don’t think people realise how much local councils and local health boards/trusts are paying!

My point is, that you can gamble by paying an absolute fortune for a care annuity that isn’t taxed (you need approx. £500k for every £75k a year and if you only live a year, all that money is gone) from your pension or you can pay a horrific amount of tax on withdrawing the necessary cash. Money for care fees should NOT be taxed.
People with little pension provision but who own a property that is signed over for care ‘win’ in this situation, if that property is jointly owned then it’s not even taken into consideration, even if worth millions.
Do people not realise that with married couples, the last to die can leave £1million before ANY IHT is due? I don’t think it’s an unfair tax at all, it’s unfair that rich people can get around it.
If neither of us need care and we die with plenty of cash in our pensions, DD will get our house tax free and only pay her nominal rate of tax on our pensions ( if we die after 75 - before that it’s tax free) She could potentially have half a million tax free.

IHT revenue wouldn’t touch the sides of the social care budget, which is growing with the aging population.

Iht is a horrible thing. If it was paid on all inheritances, regardless of the amount, people would be up in arms.

So a poorer demographic has to pay for a wealthier one?

Anybody in a position to care about IHT can afford to make their own advance financial arrangements to minimise it.

One more thing.
Anyone with life insurance to cover a large mortgage or to protect their family - PLEASE get it written in trust, it then takes the payout outside your estate so no IHT is due, plus it’s paid out quicker.
It must be devastating to lose a partner and then find out the life insurance that you thought would pay off the mortgage or help your family, is taxable.

I didn't suggest that. How would that even happen? The government just keeps paying more and more out with their printing press.