Sunday, February 21, 2010

Labour's Town Hall Death Tax

Labour’s Pay As You Die tax: Give up your home as council tax soars
Pensioners to be forced to sign away their home’s equity to stave off town hall bailiffs.

Labour have legislated to create ‘enabling powers’ to create a deferment scheme for pensioners, allowing the elderly to pay off their accumulated local tax bills when they sell their property.

In order to stave off local authority tax collectors and bailiffs, this Government scheme was quietly enacted in November 2009 and will permit pensioners to ‘defer’ their council tax bills, and instead pay - with interest - when they their property is sold or on death of the surviving resident spouse. Such a policy though will pressure many pensioners on fixed incomes to sign away their homes if they are struggling with their council tax bills. Council tax will effectively become a form of inheritance tax.

· Ulster first, England next: Northern Ireland is being used as the testing ground for the tax scheme, just as the poll tax was controversially first trialled in Scotland. The ‘enabling’ legislation was passed by Labour Ministers in Whitehall under direct rule in 2006. In an unnoticed announcement in November 2009, it has now been implemented across Northern Ireland, raising the prospect of the rest of Britain facing the scheme in any Labour fourth term.

· £73,000 Pay As You Die bill: Estimates suggest that over a twenty year deferment, a typical home in England would be left with a £73,000 tax bill, which would be levied on top of inheritance tax and any cost for social care. A charge would be placed on the property, giving local councils second call after the taxman had grabbed his inheritance tax share. Town halls will effectively raid estates from beyond the grave and make children pay huge bills left by their dead parents.

· ‘Robbed of their birthright’: Pressure groups have expressed their alarm at the plans. The Institute of Revenues Rating & Valuation has warned of a "perception that the ratepayers and their offspring are being robbed of their birthright". The Fair Rates Campaign have labelled it a "Pensioners Savings Tax" with pensioners becoming "debtors to the government". The Consumer Council has said "older people may feel forced into a system that they don’t fully understand... We are worried about the potential amount of debt that an older person could accumulate against his or her property."

· Support from across the left: Such a town hall death tax has been supported by Gordon Brown’s review into town hall finances by Sir Michael Lyons; by former Local Government Secretary Stephen Byers; and by Vincent Cable and the Liberal Democrats.

Caroline Spelman, Shadow Secretary of State for Communities and Local Government, said: “This is another savage raid on the savings of the elderly – pension funds were first, then social care, and now people's homes. Under Labour plans supported by Liberal Democrats, the vulnerable risk being pressured into signing away their homes’ equity to stave off the tax man. This pay as you die tax is just an excuse to hike up council taxes even more while avoiding the sight of pensioners being sent to jail for non-payment. Gordon Brown is intent on turning council tax into a second inheritance tax, and there is nothing he won’t tax.”

Lord Glentoran said on behalf of the Conservatives in the House of Lords: “We are completely opposed to this new system... People on fixed incomes—pensioners who might be asset-rich, but in cash terms, poor—single-person households and those just outside the benefits system will be hit especially hard... To gather the information required to implement the new system involves huge erosions of liberty. Unprecedented powers are being given to the Government to compile data on family homes, literally to spy on people using aerial photographs and the like. I mention too the sinister Article 38 powers of entry and invasions of privacy for government inspectors to assess, with fines for those who simply want to keep the snoopers out. The new system is unjust and undemocratic. It is opposed overwhelmingly across the community in Northern Ireland"

The Consumer Council have said: “Older people may feel forced into a system that they don’t fully understand. We have particularly noted that any costs and fees related to the scheme can be rolled up as an additional charge along with the rates on the property, this may also include the cost of accessing advice. We are worried about the potential amount of debt that an older person could accumulate against his or her property. Furthermore, the availability of a deferment scheme may set a precedent with the threat of charges other than rates and the associated costs being made against the property. Short-term expediency may be stronger for some than the longer term implications.”


Blogger john in cheshire said...

I'll keep saying this - what do the lying, bullying, thieving socialists have to do before their supporters see them for what they are?

21 February 2010 at 15:27  
Blogger Anabaptist said...

It has been obvious for many years that we are governed by bandits.

They will now do anything to expropriate money to pay for their clients: welfare dependents, useless non-jobs, and ideologically correct indoctrination officers.

How many individuals' death taxes will it take to pay for the government's £60 million carbon credits being paid to rich Indian businessmen?

21 February 2010 at 15:49  
Anonymous graham Wood said...

"Gordon Brown is intent on turning council tax into a second inheritance tax."

This, plus Anabaptist's comment above says it all.
Taxes levied by the government should only be made to fund absolutely basic public services - not a vast and ever expanding employment scheme for parasites.

21 February 2010 at 16:16  
Anonymous philip walling said...

This is entirely consonant with this government's intention to turn Britain into a socialist state.
Nobody should be surprised at the appropriation of private property.

When council tax was introduced every freehold residential property in Britain became a conditional freehold: it's yours so long as you pay the council tax and if you don't it's forfeit to the Crown.

The punishment for non-payment is not against the person, but against the property: in rem, not in personam, as lawyers would say.

This latest scheme is just an extension of that. And seems to me to be an attempt to get a share of the vast but illusory increase in the value of property over the last twenty years, which this government encouraged (partly because its members were profiting so much from flipping their houses during the boom).

But it's not going to be as bad as it seems because when house prices begin to decline properly, as they undoubtedly will before long, they will not be worth enough for the state to recover the eye watering sums that will be owed in council tax.

21 February 2010 at 16:22  
Anonymous Anonymous said...

It will be interesting to see just how many people take the equity out of their homes.

21 February 2010 at 16:26  
Anonymous not a machine said...

Your grace touches upon somthing I had not thought of , namely who needs the money to provide the service.
The conservatives are right to oppose this and goodness knows what the lib dems are doing in bed yet again labour on assett stripping the eledrly as a figleaf for overspending big government.

That is what people are so angry about billions on banks and banks bounuses ,millions on ID cards , millions on failed IT projects , millions on unaffordable railways , millions on climate change projects when the head of the IPCC has been sacked for erm making it up a little .

Then our politicians convene a crisis meeting unapolagetic about the millions wasted for demagraphic problem they have known about for years ,whilst watching all this going on .

There are then the more far reaching socialist stealth attack on whose wealth it is and making up a tax that is nearer robbery not just on the pensioner but an benefits of keeping wealth in the UK economy rather than throwing it upon the state knows best vanity bonfire .

Come election time I intend to send this up like a rocket , its nothing more than yet another uncosted socialist ponzi scheme to try and cover the errors/fraud of this government and its emerging desperate state control ideaologies.

21 February 2010 at 17:42  
Anonymous len said...

Bail out the bankers and reclaim it from the pensioners.
Socialism in action.

21 February 2010 at 17:51  
Anonymous no nonny said...

As Len says: "Bail out the bankers and reclaim it from the pensioners.
Socialism in action."

Then get the pensioners in hospital, and .... is that a Dalek that I see before me?

21 February 2010 at 17:58  
Anonymous GTGTWG said...

Labour have created a society of dependants. It's control pure and simple. They have to get money from somewhere to keep the people on benefits in the lifestyle they've become accustomed to. Don't get me wrong, there are genuine people who need the system but how many people are simply leeching? Does this handing out money empower them to become the best that they can be? I know young people who are now baby boomers who've never worked from leaving school. These same people will have everything found for them in old age as they have all their lives. It is the same old story. Britain penalises the tax payers for the benefit system, the gangster bankers, the MP rip off merchants, and let's not forget the immigrants who arrive to rip off the tax payers (yes I know there are lovely immigrants that work hard. I'm not talking about them). And the biggest tax payer leech of all, the EU! Money has to come from somewhere you know!

21 February 2010 at 18:22  
Anonymous Ross J Warren said...

I agree with you GTGTWG many of the people who form the hardcore of the dependants are genuine and in need. The problem is how many should have been eased back into productive work but were denied the intervention. We have a problem, some of the Millions will indeed continue to need support.
If we had spent money on getting these people back to work, rather than paying them to go away, we would have saved Billions in the long run.

21 February 2010 at 19:05  
Anonymous Anonymous said...

another day
another outrage
but what is the Tory response?

21 February 2010 at 20:06  
Blogger Lord Lavendon said...

" Short-term expediency may be stronger for some than the longer term implications"

Yes your Grace as with the Brown raid on pensions, this is a question of money now, PAYE later. Blasted socialism!

21 February 2010 at 20:09  
Anonymous Anonymous said...

The nanny turns predator, and plans to steal everyones property. Meanwhile the Tories are going to sell our nationalised banks, that was bailed out and fixed with our money, at a cheap rate back to Under the communistic slogan "Peoples bonus"

Time to get out guys

21 February 2010 at 21:39  
Anonymous Anonymous said...

If you keep your property in a trust you can pass it on without paying this levy.

And dont buy any stocks cos as soon as the election is over the market will crash.

21 February 2010 at 21:42  
Blogger Gnostic said...

How many custard pie facials does this clown think we'll take?

Verification gonalike. This morning the verification fairy is feeling mercurial.

22 February 2010 at 08:15  
Anonymous Ian said...

This would be the thin end of the wedge of course. Once the principle of collecting taxes retrospectively on death is established they can invent any number of unpayable new taxes and effectively use them as a way of increasing inheritance tax on the sly until they take every last thing we have. How do I loathe socialists? Let me count the ways...

22 February 2010 at 09:21  
Anonymous philip walling said...

I love your optimism Mr Anonymous on 21.2.10 @21.42 that a trust of your property would protect you from the predations of the state. Why should the law not include any property of which you were the beneficiary?

For hundreds of years during the Middle Ages the Crown tried to stop property being held in trust to avoid feudal dues. The Crown simply made any beneficiary of a trust into the legal owner - in other words executed the trust so that the trustees owned nothing.

There is nothing to stop this government from doing the same thing.

22 February 2010 at 09:31  
Blogger Manfarang said...

No problem.Just set up a few businesses in Belize.

22 February 2010 at 09:43  
Anonymous Anonymous said...

"Why should the law not include any property of which you were the beneficiary?"

Correct but right now the moneyed oligarchs are so powerful that going after trusts would damage their ability to ....hide... from laws designed to tax / confiscate wealth. Undoubtebly if the "peasantry" catches on to trusts to a large degree then government will revisit trust laws.

People need to understand when it comes to governments your basicaly dealing with lawless people whom lack any scruples or moral justice. Post Soviet Union all governments of the western world seem to be embarking on an attempt of a new softer soviet style system. I guess they recon this attempt they can gain better control of the masses through a perception of choice and protection from fears.

22 February 2010 at 10:49  
Anonymous AllanJ said...

Which taxes would the commenters here propose are raised to allow the asset-rich, income poor (Fred Goodwin included?) to pay no taxes and to enjoy expensive care for free so that their children can enjoy somewhat larger inheritances?

Why is it that Tories, who are so convinced of the benefits of creating strong incentives to work, consider the passing on of housing wealth from generation to generation such an overwhelming imperative? I suspect it is not altogether noble motives.

22 February 2010 at 21:17  
Blogger Weekend Yachtsman said...

This is unsurprising, given that NuLab reqards everything as being basically the property of the State, albeit you are allowed to enjoy some of the benefits, for a while, as long as you meet their ransom demands.

But note this particularly: "...a £73,000 tax bill, which would be levied on top of inheritance tax and any cost for social care."

In other words, they tax you all your life to pay for "cradle to grave" welfare; then when you actually need treatment, they make you pay for it, then after you die they take your stuff too. So you end up paying three times over.

I think when I get old I will take out all the equity in my house and spend the money on a big f***-off holiday. At least they can't take that away after I'm dead.

How long I wonder before the State takes a legal charge on everyone's property so that they can't do that? Anyone betting against?

23 February 2010 at 14:33  
Anonymous Anonymous said...

The Government knows full well that people utilise trusts to shield their assets, in fact it even recommends them on Anon 22/2 10.49 is, I think, quite right: as long as the practice doesn't become widespread, it'll continue to be allowed.


24 February 2010 at 21:06  

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