Debating the idea of a death tax

A senior MP is keen to reopen the debate about introducing a “death tax” to pay for people’s care in old age.

Andy Burnham, who is among the favourites to be the Labour Party’s next leader, is understood to support a return to the system where social care is financed by placing a levy on people’s estates when they die.

The Shadow Health Secretary has argued in favour of reform because he believes the current arrangements penalises those who develop conditions such as dementia and need care in old age.

The Conservatives have fiercely criticised the suggestion, fearing that a 15 per cent levy could be imposed on estates. This would mean a tax of around £46,000 for the average Briton.

In addition, the “death tax” would likely be on top of the existing Inheritance Tax (IHT), meaning that those with large homes would be saddled with significant payments.

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