The income tax take from taxpayers over 65 has, according to independent reports, virtually doubled over the past 20 years. This is from self-employment, employment and property investment.
This is not the end of the matter as there is an increasing groundswell in Westminster to levy
National Insurance on those above 65 who are still working. The current situation is that over 65’s
are exempt from making NI contributions.
To make matters worse, if social care is needed at some point after retirement the vast majority of
that person’s assets and income are potentially at risk. If you do not need to go into residential care
but can be looked after in your own home your house cannot be claimed .However, if your assets,
excluding your home, are above £23,500, which is the current threshold for funding, you will not be
eligible for subsidised support. If residential care is needed the value of your home is taken into the
consideration of your assets. To determine what financial support you might be entitled to you will
be means tested by your local authority.
It is becoming increasingly important to plan for older age both with regard to taxation and social
care cost mitigation .As with all planning the earlier this is done the better. Thought should be given
to making a will, estate planning, and the possible use of trusts to negate care home fees.
Consideration should be given to the inter-action between planning for capital taxes such as
inheritance tax and planning for social care mitigation because success on the one hand can give problems on the other.
For constructive advice in respect of the above please contact us on 01462 420042 or info@hw-
associates.co.uk.