Threats to our inheritance- elderly care costs, CGT (capital gains tax) and the dwindling family finances effect

Elderly Care Costs

A major worry -Elderly Care Costs. In my view the ever increasing government “looting” of the family assets (asset stripping) could eventually leave future generations without any inheritance at all. This could lead to a starvation of funds for the next generation of wealth creators-entrepreneur’s. Traditionally, many new businesses only ever got “off the ground” due to an inheritance.

Elderly care costs

For the (non-entrepreneurial) beneficiary’s amongst us, the ability to accumulate any savings, buy a holiday, new car, home improvement all of which provides employment as well as new work and tax revenue are very limited.

Not to mention no nest egg for their children or grandchildren. Unfortunately, governments have by their policies prevented much of our inheritance money from circulating within the economy.

Elderly care costs

Case study scenario elderly person living alone.

Take the case of my own mother and father.

Dad had worked hard all his life in various factories and apart from owning their own home had little in the way of Savings.

elderly care costs

A few years dad’s aunt died, which meant a sum of money passing over to Mum and dad as well as his brother Geoffrey. Naturally inheritance tax was paid on the sum received. Subsequently Dad’s brother died and dad received an inheritance from Geoffrey net of inheritance tax-the same money taxed again. When dad later became unwell and needed care he had to pay because he had savings. In my view, this was money acquired and not savings, and indeed the government had already dipped into this money twice. Mum incidentally by then had passed away.

elderly care costs

Next on the list would have been the potential seizing of Dad’s home to pay for all or part of his residential nursing care. (See BBC News: Selling a home to pay for elderly care)

As it turned out he died just before being sent into residential care.

Although I do not have the exact figures the number of homes seized to cover nursing home costs runs into many thousands.

What is the main problem with paying for elderly care?

This means that for many children their one chance of enjoying a better life for themselves, or fulfilling a dream of their own business is shattered. Moreover it leaves less money circulating in the economy, reducing business start ups= less tax revenue.

elderly care costs

On the other side of the coin in recent years, despite media hype, apart from London, property prices have not risen. If this trend continues, then the government would be less inclined to steal your home as it wouldn’t be worth any more than you originally paid for it. Stagnant property prices have few benefits, but this could be one of them.

That said house prices since the beginning of the 20th Century has always risen, and why not, it’s good to have a healthy property market.

Yet we see the bank of England panicking when they see a (what was regarded in the past as normal) 5 % annual increases. They say we must take swift actionnI say- rubbish. If prices remain static,our single most common means of wealth creation will be lost. Often people would sell a home for a decent profit, trade down, then use the funds to start a business.

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