Is the Dementia Tax a plan to make money for Theresa May and her husband?

Philip and Theresa May.

Here’s an interesting possibility, mentioned today by a commenter to This Site:

“The other commercial opportunity: the dementia tax is a stealth incentive to take out equity release mortgages.”

I had to look up what an equity release mortgage is; being in social housing, I haven’t had the opportunity or the need to find out about this particular financial product. Here’s what I found, courtesy of moneysupermarket.com:

With a lifetime mortgage, you take out a loan, secured on your property, and receive that amount as a tax-free lump sum. You do not usually make monthly repayments. Instead, the interest “rolls up”, and the loan plus interest is repaid after your death, when the property is sold.

With a home reversion plan, you sell all or part of your home in return for a tax-free lump sum and a guaranteed lifetime lease, with no monthly repayments to meet. After your death the house is sold, so the lender gets back its percentage share.

The only difference between this and the Dementia Tax is that, with the Dementia Tax, homeowners would buy an insurance policy instead of taking out a loan – guaranteeing that no money returns to any family member after the death of the homeowner.

(Or so it seems to me.)

The commenter adds: “This fast-growing market is dominated by Legal and General in the UK (29pc market share), of which a major shareholder is Capital Group, of which a key UK executive is Philip May, husband of Theresa May.”

Mr May is certainly a Capital Group shareholder, as described in this Guardian article. The headline may be a candidate for the Graun‘s ‘corrections and clarifications’ column because Capital certainly holds shares in Legal and General, and if L&G ends up selling the “products” the Conservative Party claims will be available for people facing the Dementia Tax, then it seems unlikely he has taken the “back seat” after all.

Perhaps he is a back seat driver?

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28 thoughts on “Is the Dementia Tax a plan to make money for Theresa May and her husband?

  1. Christine Cullen

    If the Tories get back in I shall be paying a visit to my solicitor to find the best way forward to ensure that my sons don’t get fleeced when I pop my clogs. Just when you thought the Tories couldn’t get any worse they seem to always manage it!

  2. David

    You know that this article and post are criminal during an election?

    This contravenes Section 106 Representation of the People Act 1983 and is therefore contrary to criminal law

    I have reported it

    1. Mike Sivier Post author

      Why?

      It is not a false statement as no statement has been made; a question has been asked.

      Nice try, but it won’t work.

    2. rob

      To whom have you supposedly reported this hummmm !
      Trying to silence ligitimate and Legal discourse ehhh !
      Epic FAIL Tory troll now xxxx off
      BTW I have taken legal advice from my good friend (barrister) who confirms this does NOT contravine section 106

    3. Mike Parr

      Yer talking bull**** & I conclude that you are a tory-troll or simply incapable of comprehension (actually is there a difference). For the avoidance of doubt 1st bit of 106 below. Nothing false in the above article – nice try – now get back in yer cage.

      106 False statements as to candidates.

      (1)A person who, or any director of any body or association corporate which—

      (a)before or during an election,

      (b)for the purpose of affecting the return of any candidate at the election,

      makes or publishes any false statement of fact in relation to the candidate’s personal character or conduct shall be guilty of an illegal practice, unless he can show that he had reasonable grounds for believing, and did believe, that statement to be true.

      1. Mike Sivier Post author

        Have we really?
        I don’t think we’ve seen any such evidence.
        Perhaps you’d like to elucidate?

  3. Sara Smith

    Seems its just not Mrs and Mr May that might be benefiting from dementia, the TV ad for the cure of dementia is hitting our screens every break.

    More money will be thrown at the charity because now everyone wants a cure to escape Mad Mays Dementia tax.

    Mr Cameron ( the head honcho of the charity), will be in his counting house counting out the money.

    LOL you couldn’t make this crap up if you tried.

  4. Steve

    what bothers me is the fact that at one time, anyone and everyone could “follow the money” and discover all sorts of financial things online. now, for some reason, that option is no longer available to us. seems the money has dried up, or gone altogether. i suspect that Mr May has plenty to hide and his wife may have had it all covered up, , for obvious reasons.

  5. jeffrey davies

    made me smile a 106 bugger 252 you on son oh dear me my army days but carry on mike your site atleast gives us news that the bbbc channels 4 and 5 cant or wont give bloody dementia attacks whot you don’t want it to but like a lady said burn it down before they can have it

  6. llewellyn

    This is just too silly for words.

    1. There is at best a tenuous relationship between the dementia tax and equity release mortgages
    2. Equity release mortgages are a tiny fraction of Legal and General
    3. Capital Group owns a small fraction of Legal and General

    Therefore the dementia tax has a miniscule effect on Capital Group’s profits.

    Let’s take you through some numbers
    1. Equity Release mortgages were 1.24 bn in 2017
    http://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/equity-release-schemes-popularity/

    2. If L&G has 29% of this market then they have 360m of this mortgages

    3. L&G’s assets under management are 894bn
    https://www.google.com/search?q=legal+and+general&rlz=1C1NHXL_enUS723US723&oq=legal+and+general&aqs=chrome..69i57j0l5.2935j0j8&sourceid=chrome&ie=UTF-8

    4. Therefore equity release is responsible for 0.04% of L&G’s profits (360m divded by 894bn)

    5 Capital Group is not even listed one of the 10 largest shareholders in L&G. I doubt that they have 1% of their assets invested in L&G
    http://www.4-traders.com/LEGAL-GENERAL-GROUP-PLC-4002140/company/

    Even if Capital Group had 10% of their assets invested in L&G (which would be impossible), then the equity release market doubling would increase Capital Group’s profits by 0.004%

    Do you honestly think Theresa May is going through all this for a 0.004% increase in her husbands profits? And that is an overestimate. There’s no real reason to suppose that the equity market will boom as a result of this tax anyway.

    1. Mike Sivier Post author

      You have no idea how much money would come to any company running such an insurance system, therefore all your numbers are nothing more than speculation. You don’t mention the value of Capital’s assets, therefore you cannot calculate what it has invested – and even if you did, you wouldn’t know how much it would make from the Dementia Tax.
      Basically, you’ve just produced a lot of nonsense.

  7. llewellyn

    “You have no idea how much money would come to any company running such an insurance system”

    Yes I do. I have assumed in what I wrote that the profitability would be similar to the other financial products of L&G. It would be very rare for the profitability to be very different from average, otherwise the market would adjust. Assume that this product is twice as profitable as average (a huge leap) and the effect on Capital Group is 0.008% instead of 0.004%.

    “You don’t mention the value of Capital’s assets, therefore you cannot calculate what it has invested ”

    The value of Capital Group’s assets is irrelevant to the calculation. What is important is the proportion of them which are invested in L&G. I’ve assumed and stated it to be a ridiculously high 10% for purposes of the calculation. No large institution would risk this much in a single investment, but assume that they lost their senses and invested all their money in L&G then the effect would be 0.04% instead of 0.004%.

    “even if you did, you wouldn’t know how much it would make from the Dementia Tax.”

    No, but I can calculate an upper limit, which is what I’ve done. It’s tiny.

    “Basically, you’ve just produced a lot of nonsense.”

    OK, you show what the effect will be on Capital Group’s profits then. Show your working, like I did, and source your numbers, like I did.

    1. Mike Sivier Post author

      Impossible.
      You don’t know the numbers.
      I don’t have access to any privileged information.
      You are asking me to join you in pie-in-the-sky speculation.
      No, thank you.

      1. llewellyn

        “You don’t know the numbers.
        I don’t have access to any privileged information.
        You are asking me to join you in pie-in-the-sky speculation.”

        Oh, and that’s a bit rich coming from you. You’re prepared to speculate and cast innuendo about supposed malpractice without any evidence whatsoever. But when someone actually provides you with evidence and sources it, you call it “pie in the sky speculation”!

      2. Mike Sivier Post author

        You haven’t provided evidence. You have speculated.
        Sorry if you don’t like my response.
        I see no point in continuing this correspondence.

  8. Rob

    llewellyn , its dead simple , you are being disingenuous and naive if you think there will be no harm caused by this incestuous relationship between Mr May and L&G and the equity release forced upon people to fund their social care . Take one look across the “pond” and the USA insurance based health care system of rip off for the end result of what will happen here . So stop being dumb and excusing the Tory b****rds ripping off vulnerable old folks . Mike is right and you know it son !!

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