What a comfort to know that we won’t have to sell the family home when we can no longer cope with it. In a naked display of vote-grabbing, our dear coalition government has decided that nobody will have to pay more than £75,000 for geriatric care (terms and conditions apply) while insisting that much of the £1 billion cost of this generosity with our money can be found by a gentle squeeze on inheritance tax.

Even by the standards of our incontinent administration, this is a bit rich. Last March the IHT threshhold was frozen until 2016, and its putative indexation thereafter would be against the Consumer Price Index, rather than the more sprightly Retail Prices Index. The Treasury’s own figures indicated that this change would bring in – wait for it – £20m in 2015/16 from 900 more estates. Let’s say the CPI inflation is running at 3 per cent then, in which case the new freeze might bring in an extra £60m a year more than previous plans, or 6 per cent of the £1 billion cost of this new geriatric bung. The vast bulk of the money will come from diddling people out of the enhanced pension they thought they were buying from the government.

The question that no politician dare ask is: why shouldn’t the elderly pay for their old age? We have enjoyed a property boom such as the nation has never seen, taking prices in many parts of the country beyond the reach of the next generation. Sheltering those gains will further widen the property apartheid between owners (and their offspring) and the rest. This is hardly a recipe for social cohension, far less social mobility.

IHT is a shambles anyway. It’s sometimes decribed as a tax paid by those who trust their relatives less than they do the taxman, and falls almost exclusively on the middle-rich. Those with estates below £325,000 (or twice that for a married couple) don’t pay it, while the rich can deploy an array of avoidance devices. Besides, if you have a £10 million fortune, you can give up 90 per cent of it and still feel confident that you won’t run out before you die.

The 40 per cent rate that clobbers those in the middle is a standing invitation for abuse; valuable assets disappear from view, properties become mysteriously run-down for probate valuation, and oldies are pressed to sign complicated, or even fraudulent, documents. Were the rate to be cut to 10 per cent, with no exceptions beyond a de minimis level where it’s not worth the taxman’s bother,  the IHT avoidance industry would take a hit, the relatives would behave better, and in all probability, the tax take would actually go up.

There’s no chance of anything like that from this, or any other administration, which would prefer us to believe that the massive cost of long-term care can be met from a near-meaningless freeze of the IHT nil-rate band. Such is the general level of financial ignorance, they’ll probably get away with it. And then we wonder why the nation’s finances are so dire.

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