‘Death-tax’ considered by Government

As part of a Budget announcement around social care funding, the Government is considering changes including a potential “cap” on long-term care costs as well as a “death tax”.

In recent months, according to a report from the Financial Times, a committee of social care experts reporting to the prime minister, has been looking at various available options for the funding of elderly care.

In the upcoming Spring Budget, Chancellor Philip Hammond is expected to declare hundreds of millions in emergency funds for available for social care.

A “death tax” has also been considered according to the FT report. This was suggested previously under the Labour Government of Gordon Brown. At that time, it was suggested that a tax of 10% would be applied to all estates in addition to inheritance tax.

Despite it being abandoned 2 years ago, the committee also re-examined a cap on the costs of long-term care.

The Department of Health postponed plans to introduce a £72,000 cap on long-term care costs in July 2015. Although this was expected to come into force from April 2016, it was actually delayed until 2020.

Compulsory social insurance was another proposal put before the committee, as well as suggested reforms from Sir Derek Wanless after his review of the social care system in 2006.


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