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DT: Dementia tax row - Pensioners told homes are not 'assets to pass on to offspring'

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22 minutes ago, chicker said:

I'm just about a boomer but  my parents had years of rationing , hardship, national service but full employment and cheap housing after ww2.  .

Ditto for me and my family

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oldsport   

They could try combining their two proposals.

So you would need to pay for care whether at home or in residential  - but have a £100K overall cap on costs - and the last £100K is protected.

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6 hours ago, Greg Bowman said:

Its not a tax on boomers its outright robbery.

Whilst the country fills itself with millions of people who haven't contributed through the ages to our society but take out from day one or never do a days work in their life sponging off the working population and then get care free this will be controversial

Set aside house price gains which are a separate issue - it's theft pure and simple until that system is sorted out

I also fail to see how it will appeal to younger generations - stealing Mum and dad's or Grans house

As sikejsudjek  says self destruct and I would say not sure even Sun readers are on side now

The whole system of credit could pay for everything without the need for taxes.  every year we run budget deficits that get larger to pay for other stuff that somebody seems to need, in fact it would likely bring about hpc and economic change quicker if everything was drawn from the future and let the boomers and others keep for now what they think they own.

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dgul   

High house prices are a tax on the young to pay for the lifestyle of older people.  Young people pay loads of money (everything they've got, really), older people with houses prop up the economy with consumption.  Moreover, some of what is left over is used to by housing by their descendants, so providing a prop that stops the whole system finding a different (lower) equilibrium point.  It is actually quite a clever system -- and young people are all too willing to pay what is an extortionate tax rate just to live somewhere.

If houses are sold to pay for care, then this tax on the young will also be used to pay for 'healthcare'.

I don't really like the idea of people with substantial assets getting stuff for free when everyone else suffers (well, stuff for free that won't be free by the time I get there), but this Tory's suggestion is the worst of all possible worlds*.  Better to have lower housing costs and higher overt taxation rates -- at least everyone suffers a little that way, not just the young suffering a lot.  But they won't do that, so we're stuck with what we've got.

[*it is bad enough as it is.  Why is there a 'shortage' of nurses and teachers?  Older teachers/nurses/etc have got years of index-linked pay rises, rock solid pension and no housing costs, so can afford to go down to 3 days/week or retire early.  Young people can't afford a decent lifestyle on teacher/nurse/etc starting salaries, so don't enter (or leave when they realise they can't afford anything).  It would be so much more healthy for the economy if older (50s say) people had to keep on working while younger people could have a decent life on normal earnings.  The entire economy is completely buggered up]

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10 hours ago, fru-gal said:

I don't get this line of thinking. What does she think Labour will do if they get in?

I think it's a view on how efficient which party is at stealing your money and distributing it against your will 

The Tories have always been better at that

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13 hours ago, fru-gal said:

I don't get this line of thinking. What does she think Labour will do if they get in?

It gets worse this person thinks immigration is responsible for all problems in the UK (I don't) and voted Green - who want unlimited immigration.  It makes me weep.

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5 hours ago, dgul said:

High house prices are a tax on the young to pay for the lifestyle of older people.  Young people pay loads of money (everything they've got, really), older people with houses prop up the economy with consumption.  Moreover, some of what is left over is used to by housing by their descendants, so providing a prop that stops the whole system finding a different (lower) equilibrium point.  It is actually quite a clever system -- and young people are all too willing to pay what is an extortionate tax rate just to live somewhere.

If houses are sold to pay for care, then this tax on the young will also be used to pay for 'healthcare'.

I don't really like the idea of people with substantial assets getting stuff for free when everyone else suffers (well, stuff for free that won't be free by the time I get there), but this Tory's suggestion is the worst of all possible worlds*.  Better to have lower housing costs and higher overt taxation rates -- at least everyone suffers a little that way, not just the young suffering a lot.  But they won't do that, so we're stuck with what we've got.

[*it is bad enough as it is.  Why is there a 'shortage' of nurses and teachers?  Older teachers/nurses/etc have got years of index-linked pay rises, rock solid pension and no housing costs, so can afford to go down to 3 days/week or retire early.  Young people can't afford a decent lifestyle on teacher/nurse/etc starting salaries, so don't enter (or leave when they realise they can't afford anything).  It would be so much more healthy for the economy if older (50s say) people had to keep on working while younger people could have a decent life on normal earnings.  The entire economy is completely buggered up]

I agree with a lot of what you say, but I don't think high house prices benefit many people financially.  Obviously there are psychos who like thinking that I live in a £1 million pound house but that benefit is only to their ego nothing more.

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15 hours ago, NuBrit said:

Have cake...

Want to eat it...

+1  This is not medical care we're talking about - that is free on the NHS.  Why should the taxpayer be funding the cost of paying someone to help another's parent get dressed?  The arguments are all pretty similar to those around childcare EXCEPT that the person getting the benefit of having someone else help their parents also receives a massive lump sum at the end of it.

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nayth   
18 hours ago, Tulip_mania said:

The problem is really one of the Tories own making. For at least 10 years, they have via; increasing IHT thresholds (particularly for housing wealth) and the 'Death Tax' attacks during the 2010 election been embedding the concept that taxation of estates is wrong. Their media cheerleaders Mail/Telegraph/Express are very keen to join them in this.

You can't just undo that 4 weeks out from an election, if they want to do it they need to keep gently banging on about it for a few years so if they propose it in future it's not a shock. The actual plan was a bit rubbish, it was a lottery not a tax.

Much better would be to have 20% IHT from £125,000, 40% IHT from £500,000 and 50% IHT from £1,000,000.  Though it's a general problem in the UK that wealth inheritance/capital gains are taxed much less heavily than earned income. Capital Gains should be taxed as income (of the gain adjusted for CPI over the period which the asset was held).

Bang on.

I suppose the problem with IHT is that it's easy to avoid with planning, and not sure how feasible it is to avoid that. I think the whole tax system needs reform to address the points you have identified.

My view is social care need should be insured. It could be covered by National Insurance, which would ideally be paid for by taxing unearned income at a higher marginal rate than earned income.

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16 hours ago, giggler000 said:

The whole system of credit could pay for everything without the need for taxes.  every year we run budget deficits that get larger to pay for other stuff that somebody seems to need, in fact it would likely bring about hpc and economic change quicker if everything was drawn from the future and let the boomers and others keep for now what they think they own.

 

Yes, it always amazes me when the media/ politicians throw up their hands about something and protest "How are we going to pay for it?  We can't possibly afford it!".

It seems to have escaped their attention that the UK has been running a massive structural deficit for decades and readily gets into things like expensive wars, house price subsidy schemes, unfunded pension liabilities, ripoff PFI projects and bank bailouts without a second thought about the cost or who is going to eventually pay for it.

Why not just chuck it all on tick along with the existing things that benefit the establishment and insider cronies - it's all going to come crashing down eventually.

 

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nayth   
4 minutes ago, Loving The Crash said:

+1  This is not medical care we're talking about - that is free on the NHS.  Why should the taxpayer be funding the cost of paying someone to help another's parent get dressed?  The arguments are all pretty similar to those around childcare EXCEPT that the person getting the benefit of having someone else help their parents also receives a massive lump sum at the end of it.

Hmm, I think you're simplifying this too much. I don't think there is a clean line between medical care and social care that you imply.

If someone's parent needs help getting dressed, they will have a physical and/or mental condition - why should the taxpayer fund the cost for this only if a way of treating it has been found?

And if it were just a case of them needing help getting dressed, they would probably be at the lowest end of social care need. Those needing help to be fed, given medication, moving around, going to the toilet, perhaps every hour all through the night. 24 hours a day. Even if the person has a fit and able partner or child to care for them at all hours, they will still need some help. This will be the typical situation you will see with social care, not just getting help getting dressed. If a child had a similar level of care needs, any reasonable person would agree to the taxpayer funding this.

Plus taxpayers do fund childcare, mainly via schooling.

Why should someone receive a massive lump sum if they are fortunate enough to have a parent that doesn't need care, rather than one that does? Wouldn't it be better to address anyone getting a massive lump sum?

A fair funding model needs to be found, but I don't think getting those unfortunate enough to need it and can afford it at the end of their lives is the best model we can find.

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I have read all these posts and both sides have a lot of merit.  I am surprised however no one has mentioned that this is another bad effect of house prices rising so much.  If prices had risen with inflation since the 1960s (the rot started before Thatcher*) then prices would be a lot less and there would be

a) little to take to spend on care

b') a lot less resentment of those who have houses - because they are worth a lot less

*True she didn't do anything to make it better, she did not do as much harm as B.B.C - but that is not a ringing endorsement.

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adarmo   
22 hours ago, Greg Bowman said:

Its not a tax on boomers its outright robbery.

Whilst the country fills itself with millions of people who haven't contributed through the ages to our society but take out from day one or never do a days work in their life sponging off the working population and then get care free this will be controversial

Set aside house price gains which are a separate issue - it's theft pure and simple until that system is sorted out

I also fail to see how it will appeal to younger generations - stealing Mum and dad's or Grans house

As sikejsudjek  says self destruct and I would say not sure even Sun readers are on side now

Is it more equitable to make those requiring care pay if they have the means, or those who they've priced out the market by voting in favour of any NIMBY govt that pandered to inflate their property prices, those workers who are already paying for their final salary pensions and other generous giveaways?

Inheritance is unearned income and (imho) it should be taxed at a higher marginal rate than earned income - that's just my view and of course there's many who disagree. 

If this came in it might actually stop them (the old) hoarding large family homes and downsizing into something they can manage and run without state support (winter fuel allowance, grants etc). I like the idea of retirement villages with carers on standby so everyone has the independence they're capable of and the support and care that can ensure dignity. 

 

Are you arguing from a point of view that all tax is theft, or that this should be funded in some other way? 

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1 minute ago, adarmo said:

Is it more equitable to make those requiring care pay if they have the means, or those who they've priced out the market by voting in favour of any NIMBY govt that pandered to inflate their property prices, those workers who are already paying for their final salary pensions and other generous giveaways?

Inheritance is unearned income and (imho) it should be taxed at a higher marginal rate than earned income - that's just my view and of course there's many who disagree. 

If this came in it might actually stop them (the old) hoarding large family homes and downsizing into something they can manage and run without state support (winter fuel allowance, grants etc). I like the idea of retirement villages with carers on standby so everyone has the independence they're capable of and the support and care that can ensure dignity. 

 

Are you arguing from a point of view that all tax is theft, or that this should be funded in some other way? 

You could achieve that by stopping people getting pension credit if their house is worth more than £x pounds and reducing transaction costs for housing.

The problem about the inheritance tax being higher, is what happens if my wife and I die when my daughter is 18, should she be forced to lose her home and just after losing her parents?

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adarmo   
2 hours ago, iamnumerate said:

You could achieve that by stopping people getting pension credit if their house is worth more than £x pounds and reducing transaction costs for housing.

The problem about the inheritance tax being higher, is what happens if my wife and I die when my daughter is 18, should she be forced to lose her home and just after losing her parents?

How much would that raise? What about the asset rich and the cash poor? They'd presumably be forced to sell up? What if their 18 year old grand daughter was living with them?

If you both died that would be unfortunate but what is left over from the sale of assets, life insurance and tax should be enough. If not that's not really the tax payer's problem? Likewise, what about a family in rented with an 18 year old and both parents die? Should they be given £300k (or whatever) tax free to level the field?

Furthermore why should your daughter have to pay for oldies who wish to have their care provided in their own home at her expense when she'll be crippled by uni debt (if she chooses to go) and then have to pay extortionate amounts for housing?

I love the inheritance tax arguments because it seems to cause relatively sensible people to have a total meltdown. 

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adarmo   
3 hours ago, nayth said:

Bang on.

I suppose the problem with IHT is that it's easy to avoid with planning, and not sure how feasible it is to avoid that. I think the whole tax system needs reform to address the points you have identified.

My view is social care need should be insured. It could be covered by National Insurance, which would ideally be paid for by taxing unearned income at a higher marginal rate than earned income.

Music to my ears :) Just smash it on IHT and sort out inherited inequality too. Just think, Trump might not be a Billionaire if the USA had implemented this. Cameron might not have been prime minister, and Tony Blair's kids wont inherit the bulk of their dad's property empire. 

Also dividends, CGT and anything else where people do the square root of FA to 'make' money. Encourage people to be productive rather than speculative.

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On 10/12/2017 at 5:12 PM, Calcutta said:

If someone hasn't handed over valuable assets to their children long before they go demented then they probably weren't that fond of them anyway.

That worked out well for Princess Margaret :(.

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On 10/12/2017 at 4:21 PM, crouch said:

My understanding is that you do have to sell your property down to the SS limit (£23K?) now. I don't think this woman is proposing anything new; she is actually trying to justify the current system.

I believe I read somewhere that around 70,000 houses are sold each year to meet care bills.

..true..Labour brought this is in years ago ...most people don't realise until they come to take their home...Corbinistas used the term 'dementia tax' when May proposed to tweak the current process....if she is looking to win the next election she will have to resist tampering with the current method or dropping it altogether and become smarter ....she lost her commanding lead over this very issue....not very bright .....of course it was blamed on the 'assistants' now gone...how pathetic....:rolleyes:

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1 hour ago, adarmo said:

 

Also dividends, CGT and anything else where people do the square root of FA to 'make' money. Encourage people to be productive rather than speculative.

Those that have shares have generally laboured to get them in the first place. I don't think it is unreasonable to try and inflation proof those savings with a few shares. And cgt does apply to every disposal. Also shares have hardly pulled up any trees lately, Ftse 100 not dissimilar to 18 years ago excluding those dividends.

An easy target for politicians from the left and right though with their money in London houses and tax payer subsidised  7 figure gold plated pensions packages. Now that is what I call unearned wealth extracting. Will these parasites, like Corbyn and May, seek redress on their own unearned assets, not bloody likely.

Edited by crashmonitor

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