Concern voiced about "sinister" tax plan

NEW plans which could see pensioners signing away their homes in a "sinister" death tax to cover higher council levies has been slammed by campaigners.

NEW plans which could see pensioners signing away their homes in a "sinister" death tax to cover higher council levies has been slammed by campaigners.

Under such a scheme, elderly homeowners struggling to pay large council tax bills could opt to "defer payment" until they die. Councils would then claim back the tax from the sale of their home, with interest.

But a protest group in Suffolk, formed in the wake of 18.5% council tax hikes in the county several years ago, said such a move was not the answer.

Reg Hartles, chairman of Protest Against Council Tax Suffolk (PACTS), said: "I think it is bit of a red herring. It doesn't solve the basic problem.


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"What we want is to scrap council tax as we know it. We need something in which everybody who benefits from council tax services would contribute on an affordable basis.

"People on low incomes wouldn't contribute as much as those on higher incomes."

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He also said a lot of pensioners wanted to leave their homes to their family after their death.

Suffolk pensioner Betty Bone, a long-term campaigner against council tax, felt the option was worth considering but said she had mixed views about the plans.

She said: "If the house wasn't sold, then it could be tough for the children – but nowadays, they do earn more money than their parents did.

"It could work but it could also act as another worry for elderly people and it is still not going to help the very poor people."

Local authority charges have risen by up to 70% since Tony Blair came to power, the Conservatives have claimed.

Now pensioners who own their home could opt to "defer payment" until they die under a scheme proposed in Northern Ireland.

Councils would claim back the tax from the sale of their home, with interest.

The "sinister death tax" could be extended to England and Wales, said shadow local government secretary Caroline Spelman.

"I fear that the elderly, struggling with soaring council tax bills, will be pressured into signing away their homes to the taxman," said Ms Spelman.

"Vulnerable people face either forfeiting their children's inheritance or have the bailiff knocking on thier door for non-payment of rising council taxes."

The Office of Deputy Prime Minister, which oversees local government, said there was no reason to think the same scheme could be introduced across England and Wales.

But Sir Michael Lyons is already considering the idea as part of his independent review of council tax, said a spokesman for the inquiry, which is due to report in December.

If adopted, the accumulated tax bills could be very high, Conservatives warned.

An average Band D bill of £1,214 a year would mean a debt to the local council of £21,251 after 10 years and £75,986 after 20 years at current interest rates, they calculated.

Ms Spelman said: "If the Government really wanted to help the elderly, it should look to cut their bills by introducing an automatic council tax discount for pensioner households.

"This is another smash and grab raid on the savings of middle England - pensions funds were first, your home is next.'

A Lyons inquiry spokesman said: "Methods of deferral are within the remit of the inquiry and are just one in a range of ideas being considered."

But senior Labour MP Clive Betts, who sits on the Commons pensions committee, said: "It won't be compulsory. People will be able to pay the tax as they go along.

"So it is an option that is available for people. I think creating another option is entirely right.

"I think it is very unlikely that even if people chose to defer all or some of their council tax that it is going to take up all the value of their property when they sell it.

"There is still going to be quite a lot left in most cases I am sure."

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