According to The Times this week, families who build flats for their grandparents could get tax breaks of up to £20,000 under proposals being considered by a centre-right think-tank closely linked to David Cameron.
Iain Duncan Smith, who is lined up to head a new Department for Children and Social Justice under a Conservative Government, is about to announce an inquiry into caring for the growing elderly population.
One proposal being examined is for families who build annexes on to their homes for their grandparents to be exempt from capital gains tax when the house is sold. Duncan Smith is also considering VAT exemptions for extensions. In addition, flats built specifically for elderly or disabled relatives would not be liable for additional council tax.
All of this thinking is predicated on the assumption that it is the grandparents rather than the families who are dependent (and also the assumption, which deserves another discussion entirely, about whether people can be incentivized with tax breaks to look after their older relatives – in many families the relationships are much more complicated than that).
Increasingly, however it is the families who are to varying degrees dependent on the older generation either financially or practically, in terms of providing child care. In those circumstances, should the grandparents not be extending their often larger homes to accommodate children and grandchildren? And should there not be the same tax breaks available if they choose to do this? That would be radical thinking indeed.