Inheritance Tax and Adult Social Care Funding

There have been two interesting announcements recently which a lot of our clients should have on their radar.

The first was a request by the Chancellor to the Office of Tax Simplification to review Inheritance Tax.  In the request, it was acknowledged that the current Inheritance Tax regime is particularly complex and the Chancellor is interested to hear of any proposals for simplification of the system to ensure that it is fit for purpose and any such review should focus on the technical and administrative issues relating to Inheritance Tax.

Neil Raiseborough, Member and Head of Private Client Department at Alsters Kelley said, “I would not expect the current Government to change the existing Inheritance Tax Rules significantly nor would I expect them to change any of the current Nil-Rate Band or Residence Nil-Rate Band allowances. However, they may look once again at how lifetime gifts interact with the current Inheritance Tax system. Past Governments have toyed with introducing changes to the impact of lifetime gifts on Inheritance Tax, though no Government has ever come up with any firm proposals to changes.”

The second interesting announcement was that ahead of the Government’s Green Paper on long-term funding of Adult Social Care both the Communities and the Local Government and Health Committees are holding a joint enquiry to identify funding reforms to put to the Government to make swift and tangible progress in an area which is seen to be clearly under-funded and in which the assessment criteria of funding, particularly older adults in Social Care is significantly out of date.

Reforms have survived recent Government attempts to modify them, particularly in relation to trying to introduce a cap to the costs an individual may pay or increasing the upper capital thresholds (currently £23,250) in any financial assessment.

If asset or wealth preservation is something which concerns you then please contact Neil Raiseborough, Head of Private Client on 01926 356044 or email neil.raiseborough@alsterskelley.com