UK PM Burnham proposes 10% estate levy to fund care

Prime Minister Andy Burnham is considering a major overhaul of Britain's social care system, with a controversial proposal to replace inheritance tax with a flat 10 percent levy on all estates after death to fund a new National Care Service. The plan, which could see millions more families paying tax when a loved one dies, is expected to be detailed by the Prime Minister later this week.

Downing Street has repeatedly declined to rule out the policy. On Monday, July 27, the Prime Minister's official spokesman stated he would not get ahead of an update scheduled for later in the week but emphasized Burnham's view that without reform, the National Health Service would collapse under the strain of caring for people who should be supported elsewhere. The proposed National Care Service is estimated to cost up to 18.7 billion pounds annually.

The levy would mark a fundamental shift from the current inheritance tax system, which applies a 40 percent rate only to estates valued above certain tax-free thresholds. Married couples and civil partners can currently pass on up to 1 million pounds to their children without incurring the tax. A universal 10 percent charge would apply to all...