Large family houses in Chiswick Hammersmith area of west London
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Conservative government would remove IHT on the family home and introduce a £1m tax threshold for families

The Conservative party would seek to reduce and ultimately abolish inheritance tax (IHT) if elected said leader Kemi Badenoch in her speech at the party conference in Birmingham. 

The Conservative party leader’s much previewed speech outlined how, if elected to government, the party would seek to reduce the IHT burden “on ordinary middle-class families in every corner of our country” and in time abolish altogether as soon as it was affordable.

Ahead of the party conference Badenoch had described scrapping IHT as “morally right” but any commitment would have to be “fiscally responsible.” The party would also increase the current £100,000 cliff edge at which people lose up to £20,000 worth of childcare benefits, describing it as “unfair”, saying she did not want people to stop or reduce work as a result.

In her conference speech Badenoch explained abolishing IHT immediately would impact plans to create the Britannia shield defence policy, increase capacity in prisons, and cut the deficit. Reiterating her party’s commitment to cutting the deficit she added: “Last year, I announced our Golden Economic Rule, to impose self-discipline. For every pound we save, 50 pence will go towards cutting the deficit. We have already identified over £70 billion of savings.”

Badenoch accused the Labour Party of thinking it “selfish” to pass on estates to offspring, “We don’t” she retorted and as the “party of home ownership”, Badenoch added a Conservative government would introduce sweeping changes to IHT, enabling estates to pass on the family home without any IHT liability, and allowing couples to each leave an additional £500,000 tax free in their estate; resulting in the number of families paying IHT falling by 50%.

The ambition, she concluded would be to abolish IHT altogether as soon as affordable. Citing analysis from Oxford Economics, a subsequent release detailing the plans estimated it would cost around £6 billion in 2029/30. The number of estates paying IHT would fall from 52,100 to 22,000 in 2029-30. The measures would be paid for by savings elsewhere.

Badenoch’s speech also reiterated her previous commitment to scrapping Stamp Duty Land Tax (SDLT), and in addition, rolling back the proposed mansion tax: “I believe that people who work hard and save should be rewarded for that effort” continued the Conservative party leader. “So, conference, this is my guarantee. No Stamp Duty when you buy your home. No Mansion Tax when you live in your home and no Inheritance Tax on your home when you pass it to your children or grandchildren.”

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