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Hammond rules out death tax to fund long-term care

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Chancellor Philip Hammond has ruled out introducing a “death tax” in today’s spring Budget.

Hammond pledged an additional £2bn of grant funding for social care in England over the next three years with £1bn available in 2017/18.

He said the Government will set out its thinking on the future funding of social care in a green paper later this year.

He said the paper will “not include exhuming Labour’s hated death tax”.

Recent reports said a committee of social care experts, reporting to Prime Minister Theresa May, had been looking at a range of options for funding elderly care in past months.

The reports speculated that the idea of a “death tax” was being considered by the committee. Such a tax was previously proposed during former Labour Prime Minister Gordon Brown’s Government when it was suggested a 10 per cent tax could be applied to all estates as well as inheritance tax.

A cap on the cost of long-term care was also re-examined by the committee after it was shelved two years ago.

In July 2015, the Department of Health delayed plans to implement a £72,000 cap on the cost of long-term care. The cap was expected to come into force from April 2016, but was delayed until 2020.

Other proposals reportedly put before the committee include compulsory social insurance, and reforms suggested by Sir Derek Wanless when he reviewed the social care system in 2006.

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