Kemi Badenoch is preparing to put the abolition of inheritance tax at the centre of the Conservatives’ next election platform, as the party seeks to challenge Labour on the economy while fending off the growing threat from Reform UK.
The Conservative leader is expected to outline plans to scrap the tax entirely in her party conference speech next month, according to reports. The proposal would mark a significant escalation in the Conservatives’ attempt to position themselves as the party of lower taxation ahead of a potential early General Election.
Inheritance tax currently raises billions of pounds for HM Revenue & Customs. Estates are generally subject to a 40 per cent levy above the applicable tax-free thresholds, making the policy particularly contentious among families passing on homes and accumulated wealth.
A Conservative source told The Sun: “Kemi’s team think Labour are weak on the economy and plan to go hard on tax ahead of the election.”
“Last year she said the Tories will abolish stamp duty on homes.
“This year they are looking to see if they can scrap inheritance tax if they can make the sums add up. It’s all about inspiration.”
The standard inheritance tax nil-rate band is £325,000. A further £175,000 residence allowance can apply when a qualifying home is passed to children or grandchildren, taking the potential tax-free threshold to £500,000.
Unused allowances can generally be transferred to a surviving spouse or civil partner, potentially raising the combined threshold to £1mn. The additional residence allowance is tapered for estates worth more than £2mn.
The proposal could also become a dividing line with Reform UK, which has consistently polled ahead of the Conservatives and is seeking to attract voters concerned about taxes and household finances.
Robert Jenrick, Reform’s Treasury spokesman, has argued that any available fiscal headroom should instead be used to reduce income tax, pointing to the much larger number of people affected.
“I do think you have to think, if you have some headroom and you want to deploy it, what has the greatest effect, what will help the people who are finding life toughest at the moment?” he said at the Reform conference.
“If you were looking at income tax, there’s 40 million income tax payers in this country, versus inheritance tax, where there’s 36,000 estates a year.
“I mean, it’s a bold Chancellor to say I would rather privilege 36,000 families than 40 million taxpayers.”
Jenrick predicted the issue could become “a divide” between Reform and the Conservatives, accusing the Tories of becoming a “regional party” focused on “the sectional interests of the asset rich, the older, those who have got lucky in life”.
Reform, he said, represented “the interest of everyone and the national interest”.
A Conservative spokesman said: “We have not decided our policy platform for the conference.
“Kemi has made no secret of her desire to cut taxes, singling out inheritance tax as one of those taxes she wants to cut in a speech last week.”
The proposal comes as Prime Minister Andy Burnham faces pressure over the state of the public finances ahead of his first Budget. He has refused to rule out tax rises, saying he “won’t be unrealistic” about the “challenging” fiscal position.
Burnham has previously supported a flat 10 per cent tax on estates after death, a policy critics have dubbed a “death tax”.
“I will always take a careful approach to things. I ran Greater Manchester for 10 years and we ran a very tight ship with rock solid finances,” Mr Burnham said in late August.
“Nothing will change as I come into this role as Prime
“I will try to help them in whatever way I can, I have already done some things that will help them.”
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