Andy Burnham Inheritance Tax Policy: Could IHT Be Replaced By A Care Levy?

The last policy centres on the possibility of replacing the existing Inheritance Tax system with a new levy to fund a National Care Service. The proposal is intended to create a more predictable way of paying for adult social care while reducing the risk of people losing most of their savings or the value of their home to care costs.

However, no final inheritance tax policy has yet been published. There is currently no confirmed care levy rate, tax-free threshold, exemption structure, implementation date or draft legislation.

Burnham previously supported a 10% charge on estates when he was Health Secretary, but that figure should not be treated as a confirmed 2026 government policy. More recently, he has described the potential replacement as a progressive care levy, suggesting that wealthier estates could make a larger contribution. dy Burnham’s Inheritance Tax Policy?

Andy Burnham has suggested that the UK should consider abolishing conventional Inheritance Tax and replacing it with a levy connected directly to the funding of social care.

The broad proposal has three main elements:

• replace or substantially reform the existing Inheritance Tax system;
• introduce a contribution from estates after death;
• use the revenue to help provide a National Care Service offering greater protection against potentially unlimited care costs.

In a June 2026 interview, Burnham said he would examine the relationship between inheritance tax, care charges and social care funding without “flinching” from politically difficult decisions. He has previously discussed replacing IHT with a progressive care levy, although he has not yet provided a complete policy document.

The idea is therefore not simply to raise more inheritance tax. It is to change the purpose and structure of taxation at death so that the money contributes to a universal or substantially expanded social care system.

Has Andy Burnham Confirmed A 10% Inheritance Tax?

No. A 10% charge is associated with Burnham’s earlier social care proposals, not a confirmed new tax rate.

When Burnham was Health Secretary in 2009 and 2010, he supported the idea of a levy of approximately 10% on estates after death. The proceeds would have helped fund social care that was free when an eligible person needed it.

The proposal was presented as an alternative to the existing system in which some people face substantial care bills during their lifetime while only a relatively small proportion of estates pay Inheritance Tax.

Burnham’s more recent language has referred to a progressive care levy, rather than confirming that every estate would face a single flat 10% rate. His June 2026 economic speech also contained no detailed announcement on IHT rates or allowances. 2026, the following details remain unconfirmed:

Policy question	Current position
Will Inheritance Tax be abolished?	Burnham has previously advocated replacement, but no legislation has been announced
Will the levy be 10%?	The 10% rate comes from an earlier proposal and is not confirmed for 2026
Will every estate pay?	Unknown
Will there be a tax-free allowance?	Unknown
Will spouses remain exempt?	Unknown
Will homes receive special treatment?	Unknown
Will business and agricultural relief continue?	Unknown
When would the change begin?	No implementation date has been published
Would the levy apply across the UK?	Unclear, particularly because social care policy is devolved

Policy history

Andy Burnham’s Inheritance Tax and Care Levy Timeline

Open each milestone to see how Burnham’s position developed from the National Care Service debate to the current discussion about a progressive care levy.

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Confirmed milestone Historical proposal Current position

1. 15 July 2009 Adult care reform Green Paper presented The National Care Service debate formally advanced.

   Confirmed milestone

   As Health Secretary, Burnham made a parliamentary statement on Shaping the Future of Care Together, a Green Paper about reforming adult care and support in England. It established the wider policy debate but did not create a new inheritance tax.

   See the Parliament summary of the care and support Green Paper.

2. 8 February 2010 An estate-funded care contribution was reported A compulsory levy was discussed, but no final model was adopted.

   Historical proposal

   Contemporary reporting said ministers were considering an estate contribution to support universal care. One version discussed at the time was a fixed payment taken after death. It was a policy option rather than an enacted tax.

   Read the contemporary report on the inheritance levy being considered for social care.

3. 30 March 2010 National Care Service White Paper published The ambition was confirmed, but the long-term funding mechanism was not.

   Confirmed milestone

   Burnham presented Building the National Care Service to Parliament. The White Paper committed the government to developing a National Care Service and proposed a commission to examine fair funding. It did not establish a 10% inheritance levy in law.

   View the official National Care Service White Paper and Burnham’s statement to Parliament.

4. 1 July 2010 Burnham continued to advocate a 10% estate model The figure belongs to his historical proposal, not current tax law.

   Historical proposal

   During his Labour leadership campaign, Burnham continued to argue for a 10% charge on estates to help fund care. The proposal was not implemented and should not be presented as a confirmed modern rate.

   Contemporary coverage described his continued campaign for the estate levy.

5. 2023 The proposal evolved into a progressive care levy Burnham linked IHT reform more explicitly with wealth and fairness.

   Reported position

   Burnham was reported as supporting the abolition of Inheritance Tax in its current form and its replacement with a universal care levy, with wealthier estates contributing more. This indicated movement away from treating a single flat rate as the only possible design.

   The Chartered Institute of Taxation later summarised his earlier comments on a National Care Service and estate contribution.

6. 4 June 2026 Progressive care levy returned to national debate Burnham again connected social care reform with replacing IHT.

   Current position

   In a national interview, Burnham argued that England’s social care crisis required politically difficult choices. His recent position was described as replacing Inheritance Tax with a progressive care levy to fund a National Care Service.

   Read the interview discussing Burnham’s progressive care levy position.

7. 20 July 2026 Social care reform became an immediate priority No final inheritance tax replacement was announced.

   Current position

   Burnham pledged to use political capital to address social care. The commitment increased the relevance of his earlier care levy proposals, but it did not confirm a rate, threshold, exemption, start date or legislative timetable for replacing IHT.

   Reuters reported his renewed commitment to tackling the social care crisis.

How Does Inheritance Tax Work Currently?

Under the current Inheritance Tax rules published by GOV.UK, IHT is normally charged on the property, money and possessions belonging to someone who has died.

The standard tax-free nil-rate band is £325,000. The standard IHT rate is 40%, but it is normally charged only on the value above the available tax-free thresholds. rally no IHT to pay when:

• the estate is worth less than £325,000;
• assets above the threshold are left to a spouse or civil partner;
• qualifying assets are left to charity;
• relevant reliefs or exemptions reduce the taxable value.

A person leaving a qualifying home to children or grandchildren may receive the residence nil-rate band, potentially increasing the individual threshold to £500,000. Married couples and civil partners may also transfer unused allowances, potentially allowing a qualifying couple to pass on as much as £1 million without IHT.

The residence nil-rate band is reduced for estates worth more than £2 million.

HMRC has confirmed that the £325,000 nil-rate band and £175,000 residence nil-rate band are scheduled to remain frozen until 5 April 2031. executor or administrator normally pays the tax using estate funds.

Beneficiaries do not ordinarily pay tax merely because they receive an inheritance, although other taxes may become relevant later—for example, Capital Gains Tax when an inherited asset is sold.

Do Care Levy Differ From Inheritance Tax?

The most important difference could be the number and type of estates required to contribute.

Current IHT applies at a high headline rate but only after allowances, exemptions and reliefs have been considered. A broadly applied care levy could use a lower rate while covering more estates.

This creates two very different possible outcomes:

1. Smaller estates that currently pay no IHT could face a new contribution.
2. Larger estates that currently face a 40% marginal IHT rate could potentially pay less under a lower-rate levy.

The eventual result would depend on whether Burnham’s proposal included the following:

• a tax-free threshold;
• progressive tax bands;
• spouse and civil partner exemptions;
• residence-related allowances;
• charitable exemptions;
• lifetime gift rules;
• agricultural and business relief;
• protections for people with limited cash but valuable property.

Without those details, it is impossible to state reliably whether a particular household would pay more or less.

Estate policy calculator

Inheritance Tax vs Hypothetical Care Levy

Compare a simplified current Inheritance Tax estimate with an illustrative care levy. The care levy is not a confirmed policy.

£

Enter the estate details

Estimated net estate value

£

Available basic nil-rate band £325,000 — one allowance £650,000 — two transferable allowances £0 — no basic allowance entered

Available residence nil-rate band £0 — not included £175,000 — one maximum allowance £350,000 — two transferable allowances This simplified tool does not test eligibility for the residence allowance.

Does the whole estate pass to a spouse or civil partner? No Yes — show simplified full exemption

Hypothetical care levy assumptions

Illustrative levy rate

%

Illustrative levy-free threshold

£

Enter £0 to apply the levy to the whole estate.

Calculate Reset

Illustrative comparison

Simplified current IHT £170,000 Effective rate: 22.67%

Hypothetical care levy £75,000 Effective rate: 10%

Illustrative reduction under levy £95,000

The hypothetical care levy is lower in this simplified example.

On an estate of £750,000, simplified current IHT is £170,000 and a hypothetical 10% whole-estate levy is £75,000.

What Would the Historical 10% Model Mean for Estates?

The following examples compare the basic current IHT calculation with Burnham’s historical 10% model.

They are illustrations rather than predictions. The current calculations assume a single estate using only the £325,000 nil-rate band, with no spouse exemption, residence nil-rate band, gifts, charity exemption or specialist relief.

Estate value	Illustrative current IHT	Historical 10% levy	Difference
£100,000	£0	£10,000	£10,000 more
£325,000	£0	£32,500	£32,500 more
£500,000	£70,000	£50,000	£20,000 less
£750,000	£170,000	£75,000	£95,000 less
£1 million	£270,000	£100,000	£170,000 less
£1.5 million	£470,000	£150,000	£320,000 less

This comparison demonstrates why the tax-free threshold and progressive rate structure would be critical.

A completely flat levy on every estate could increase the burden on families whose estates currently fall below the IHT threshold. It could simultaneously reduce the bill for some larger estates currently exposed to the 40% rate.

A progressive care levy could produce a different result by protecting smaller estates and charging higher rates on larger fortunes.

Why Is Social Care Central to Burnham’s Tax Proposal?

Burnham has argued for many years that England’s social care system exposes some families to unpredictable and potentially severe costs.

Unlike NHS healthcare, adult social care is generally means-tested. Under the 2026–27 social care charging rules for England, a person with assets above £23,250 is normally responsible for the full cost of residential care.

People with assets between £14,250 and £23,250 may receive means-tested support but are still expected to contribute.

These limits can operate differently for care received outside a permanent care home. that two people with similar lifetime earnings experience very different financial outcomes:

• a person who dies without requiring long-term care may leave most of their estate to their family;
• a person who develops dementia or another condition requiring years of social care may spend a substantial part of their assets before death.

Burnham has previously described this as an unfair distinction between medical conditions mainly treated by the NHS and conditions that lead to means-tested social care.

When presenting plans for a National Care Service in Parliament in 2010, he argued that eligible care should eventually be available when needed and that families should not live in fear of losing homes or savings to care costs.

The original parliamentary proposal recognised that a comprehensive system would require a fair and sustainable contribution from the public.

Care Levy Pay for Free Social Care?

Burnham’s long-term objective has been a National Care Service based more closely on the NHS principle of support according to need.

However, “free social care” can mean several different things. A future system would need to explain whether public funding covered:

• personal care;
• nursing care;
• accommodation and food in a care home;
• support provided in a person’s own home;
• specialist support for disabled adults;
• all care costs or only costs above a cap;
• services only for people meeting defined eligibility criteria.

A levy could fund free personal care without necessarily covering accommodation, food and other everyday living costs in a residential home.

Until the government publishes a funding model, people should not assume that a care levy would remove every possible care-related expense.

Who Could Pay More Under Burnham’s Policy?

People who could potentially pay more include those with estates below the existing £325,000 threshold if the new levy applied from the first pound.

Other potentially affected groups include:

• unmarried couples who do not receive the same treatment as spouses or civil partners;
• estates containing a modest home but limited cash;
• families currently protected by the residence nil-rate band;
• people intending to leave assets to children or grandchildren;
• estates that currently qualify for agricultural or business relief;
• beneficiaries of lifetime gifts or trusts if new anti-avoidance rules are introduced.

However, these outcomes are speculative. A meaningful tax-free allowance could protect smaller estates, while a progressive rate could place most of the burden on larger fortunes.

Policy impact checker

Which Care Levy Details Could Matter Most to You?

Answer five simple questions to see which parts of any future inheritance tax replacement could have the greatest effect on an estate.

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Select the estate circumstances

Estimated estate size Below £325,000 £325,000 to £1 million £1 million to £2 million More than £2 million

Will most assets pass to a spouse or civil partner? Yes No Not sure

Does the estate include a family home? Yes No

Does the estate include a farm or business? Yes No

Is much of the estate tied up in property or business assets? Yes No Not sure

Check policy impact Reset

Your most relevant policy questions

Based on the selected circumstances, these are the policy details most likely to affect the estate.

Who Could Pay Less?

Some larger estates could potentially pay less if the 40% IHT rate were replaced by a significantly lower care levy.

This could be particularly relevant to estates that:

• exceed the £325,000 basic threshold;
• cannot use the residence nil-rate band;
• are worth more than £2 million and lose part or all of the residence allowance;
• do not qualify for agricultural or business relief;
• are left to beneficiaries other than a spouse, civil partner or charity.

The final outcome would depend on whether a progressive care levy introduced higher bands for multimillion-pound estates.

What Would Happen to Agricultural and Business Relief?

No final decision has been announced regarding Agricultural Property Relief or Business Property Relief under a care levy.

These reliefs can reduce the taxable value of qualifying farms, businesses, shares and other business assets. Removing or restricting them could create cash-flow difficulties where an estate contains a valuable business but little money with which to pay tax.

Conversely, retaining all existing reliefs could reduce the amount of revenue available to fund a National Care Service.

The government would need to decide whether qualifying farms and businesses should receive:

• a complete exemption;
• a reduced rate;
• a higher tax-free allowance;
• long-term instalment arrangements;
• conditions requiring the business to continue operating;
• clawback rules if assets were sold shortly after death.

Business owners and farming families should not make irreversible decisions based solely on political speculation.

Could the Policy Apply Across the Whole UK?

Inheritance Tax is administered at the UK level by HMRC, while social care is devolved.

Burnham’s earlier National Care Service proposals related primarily to England. Scotland, Wales and Northern Ireland operate their own social care systems and may have different eligibility, charging and service rules.

A UK-wide estate levy funding an England-only care system would raise significant questions about how revenue should be allocated. The government could instead create separate arrangements, transfer funding to devolved governments or redesign the levy as part of a broader UK settlement.

No detailed territorial arrangement has yet been published.

When Could Andy Burnham Change Inheritance Tax?

There is no confirmed start date.

A major replacement of IHT would require detailed policy development, costings, consultation, legislation and new HMRC administration. Transitional rules would also be necessary for wills, trusts, lifetime gifts and estates where a person died before the new system began.

Tax specialists have noted that firm decisions are more likely to be presented through a future Budget rather than through general political speeches. Burnham’s June economic speech did not contain a detailed IHT announcement.

This announcement should be checked against:

• official Budget documents;
• HM Treasury policy papers;
• HMRC guidance;
• Finance Bill legislation;
• Department of Health and Social Care publications.

What Should Families Do Now?

Existing Inheritance Tax law remains in force. Families should continue planning according to current legislation rather than assuming that IHT has been abolished.

Reasonable steps may include:

1. Reviewing whether a will remains valid and reflects current intentions.
2. Preparing an up-to-date valuation of property, savings, investments and business assets.
3. Checking whether spouse, charity, residence, agricultural or business relief may apply.
4. Keeping clear records of lifetime gifts.
5. Reviewing pension and life insurance nominations.
6. Considering how future care costs could affect available assets.
7. Taking regulated legal, tax or financial advice before transferring property or making large gifts.

People should be especially cautious about deliberately giving away assets to avoid care charges. Local authorities may treat this as deprivation of assets and can assess the person as though they still owned the money or property.

No one should rush into gifting a home, changing ownership structures or transferring business assets solely because of an unconfirmed policy proposal.

What Is the Bottom Line?

Andy Burnham’s inheritance tax policy is best understood as a proposal to connect taxation at death with the funding of a National Care Service.

He has historically supported replacing IHT with a levy on estates, including an earlier 10% model. His more recent position refers to a progressive care levy and a wider review of inheritance tax and care charges.

The proposal could make care costs more predictable and reduce the risk of individual families facing catastrophic bills. However, it could also bring estates that currently pay no IHT into a broader tax system.

Until the government publishes rates, thresholds, exemptions and legislation, the existing Inheritance Tax rules remain fully applicable. The historical 10% figure is a useful indication of Burnham’s previous thinking, but it is not a confirmed tax rate for 2026.

Frequently Asked Questions

Is Andy Burnham abolishing Inheritance Tax?

Burnham has previously supported replacing Inheritance Tax with a care levy, but IHT has not been abolished. Current thresholds, rates, reliefs and reporting rules continue to apply.

Has a 10% care levy been confirmed?

No. The 10% figure comes from Burnham’s proposals from around 2009 and 2010. No final 2026 rate has been announced.

Would estates below £325,000 have to pay?

That is not yet known. Under current law, an estate below the available £325,000 threshold normally has no IHT liability. A new care levy could retain a threshold, introduce a lower allowance or apply more broadly.

Would spouses and civil partners remain exempt?

No final exemption rules have been published. Transfers between spouses and civil partners currently benefit from important IHT protections, but the treatment under a care levy remains unknown.

Would the levy apply to a family home?

Burnham’s historical proposal referred broadly to assets, savings and homes. However, the government has not confirmed how a main residence would be valued or whether a residence allowance would continue.

Would the money guarantee free care?

The intention would be to improve or potentially universalise social care, but the services covered have not been defined. Accommodation and everyday living expenses could still remain separate from personal care.

Should people change their wills now?

A will should be reviewed periodically, but people should not make major changes solely because of an unconfirmed tax proposal. Current law remains the basis for estate planning.

When will more details be announced?

No firm date has been provided. Further information could emerge through the government’s social care work, a Budget, Treasury consultations or future Finance Bill legislation.