Badenoch vows to end inheritance tax on family homes
Kemi Badenoch has announced that the Tories will scrap inheritance taxes on family homes if the party is elected.
In her main address to party members at the Conservatives’ conference, she said the Conservatives would restore “common sense” as political leaders enter a “battle for the soul of this nation”.
The new pledge on inheritance taxes will not lead to its full abolition, with other property and savings still facing a levy.
Badenoch said it is her “ambition” to end the tax altogether as it now impacts middle class families.
Couples will also be ““able to leave an additional £1m pounds tax-free” to their families.
Party officials believe the reform to the tax regime will cost £6bn, based on research by Oxford Economics.
The changes will remove about 60 per cent of estates from paying inheritance tax. By 2030, about 16 per cent of estates will pay the tax under current government plan to freeze thresholds.
A Conservative spokesman also suggested there could be growth effects from the tax cut.
Badenoch’s inheritance tax proposal
Her speech focused on the party’s offer on the economy, with clear dividing lines now emerging between the main political parties. The party has already pledged to cut spending on areas such as welfare and international aid by some £70bn and said it would end stamp duty on primary residences.
“I told you that a fight was coming,” Badenoch said. “Every day, the choice at the next election is becoming clearer.
It will be between a Labour party which takes more of your money, or a Conservative party which lets you keep more of what you earn.”
Last week, Prime Minister Andy Burnham said Labour would campaign on a pledge to create a free-at-the-point–of-use care service, with economists warning he would have to raise taxes to fund it.
He also said Labour would look to drop the triple lock pension, which allows a rise in the state pension to far outpace wage growth over the long term. Badenoch said Labour’s plans were “dangerous”.
Reform UK has said it would make sweeping welfare savings to the tune of £50bn in order to raise the tax-free personal allowance to £15,000. The Liberal Democrats said rejoining the single market would also allow the government to deliver sweeping tax cuts.
Over the week’s conference, senior Tory figures have pledged to cut spending, abolish bodies such as Natural England, and leave international treaties for environmental standards. Shadow chancellor Andrew Griffith said the Tories would abolish the packaging tax and back the expansion for a third runway at Heathrow.
Senior figures have emphasised that they would only cut taxes when savings were identified, with half of cuts also set to be re-allocated to lowering borrowing.
City AM/Freshwater Strategy polling last month showed that the Tories trailed Labour by as many as six percentage points in a survey for voting intentions.
While Badenoch’s approval ratings have remained high compared to the likes of Nigel Farage or other Labour figures, her party has struggled to win back voters after a heavy election defeat in 2024. The leader said she had reformed the Conservatives as a “no nonsense party” with “drama queens” leaving for Reform.
In interviews on Thursday, Badenoch warned that the country would have a hung parliament if an early vote was called.
Party leaders at both the Conservatives and Reform have insisted they did not want a coalition. Badenoch hit out at the insurgent party and quipped that its top figures were “measuring up the curtains for their prison cells” and hit out at Suella Braverman for “openly questioning people’s identity”.