Conservative Party leader Kemi Badenoch pledged at her party's conference in Birmingham to scrap inheritance tax on family homes and allow couples to leave £1m tax-free to their heirs.
Badenoch stated that "the next Conservative government will legislate so nobody will ever pay inheritance tax on their family home." She added that couples could leave an additional £1m tax-free, meaning "every inheritance tax bill will be cut and the number of families paying inheritance tax will fall by more than half."
She also expressed a longer-term ambition to abolish inheritance tax entirely, but said she could not currently propose full abolition due to spending commitments on defence, prisons and the economy.
The Conservatives estimate the policy would cost around £6bn per year and say they have identified £71bn in government spending cuts to fund it, including welfare reductions. Under current rules, estates worth more than £325,000 (or £500,000 if a home passes to children or grandchildren) face a 40% tax rate on assets above the threshold. In 2023-24, inheritance tax affected 4.72% of UK deaths and raised approximately £7bn for the government.
Labour Party chairwoman Bridget Phillipson accused Badenoch of prioritising the wealthy, saying the Conservatives offered "nothing to help ordinary families struggling with the cost of social care." Reform UK economy spokesman Robert Jenrick said Badenoch had "chickened out of doing anything big" and was offering "handouts to multi-millionaires," while Reform would give all workers a £500 tax cut through raising the tax-free personal allowance to £15,000.
Liberal Democrat leader Sir Ed Davey said Badenoch had lectured the country on fiscal responsibility while making "tens of billions in unfunded promises."
Badenoch also announced other Conservative policies, including a £10bn anti-missile defence system, 50,000 new prison places, halved employer national insurance for workers aged 21-24, scrapping a childcare support cliff edge at £100,000 household income, and scrapping the planned "mansion tax" on properties valued above £2m.