Tuesday, 12 February 2013

Inheritance Tax: This Is Reading Not Mayfair!

So the Coalition Government has decided to cap the cost of social care charges at £75,000 which they plan to introduce in 2017.

But they tell us, as if to reassure us, that once adjusted for inflation, the figure should be regarded more like £61,000 at 2010 prices – and therefore closer to the “top end” of the £25,000 to £50,000 range suggested by the Dilnot commission.

However, in order to pay for this limited clinical cover (which will not protect the £10,000 a year those in need of care will still have to find to cover the “bed and breakfast” charges) the government has decided to freeze the level at which inheritance tax becomes payable at £325,000 until at least 2019.

Right now £325,000 will buy you a three bed house in Northumerland Avenue, which although an entirely pleasant area to live, is hardly the mansions of Mayfair or the rolling estates of the Ridgeway.
But if we use the same calculation as the government, and add in the effects of property inflation, then by 2017 the real money value level at which inheritance tax will be payable will actually bring in properties which are on sale in Reading today for around £189,000 – which would get you a two bedroom maisonette in Cardigan Road.

Before the last general election the Conservatives pledged to increase the inheritance tax limit to £1 million – with both Osborne and Cameron saying that the right to pass on untaxed assets was a “most basic human instinct” – and that it would again become a levy only faced by the wealthy.
Sadly, this government is now so out of touch with the concerns of ordinary people they seem to think bringing most of the homes in Reading – and the families who live in them – into the clutches of inheritance tax is fair.

So as they give with one hand, they snatch back more and more with the other - perhaps this is what they really meant that we would all be in this together.

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