No Inheritance Tax on the Family Home, Badenoch Pledges
Kemi Badenoch told the Conservative conference that “the next Conservative government will legislate so nobody will ever pay inheritance tax on their family home”, with couples able to leave an additional £1m tax free. The party puts the cost at £6bn a year and says it comes from £71bn of identified savings, £36bn of it from welfare.
This morning’s edition reported the cut as briefed but unconfirmed, with the deputy leader declining to confirm it on air. It is now announced from the platform, and one figure has moved with it: the welfare saving reported overnight as £30bn is £36bn in the party’s published costings. The terms are that the nil-rate band rises from £325,000 to £500,000 a person, so £1m for a couple, and the home leaves the estate altogether however much it is worth. BBC Verify’s worked example: an estate with a £2m house facing about £400,000 today would face nothing. Most couples can already pass on about £1m under existing allowances, so the real gain is the uncapped exemption on the house. Abolishing the tax outright remains an ambition “as soon as we can afford it”, not a pledge. Around 30,400 deaths in 2024-25 left a liable estate, about 5% of the total; the Institute for Fiscal Studies expects 12% by 2032-33 and says the biggest beneficiaries “would be those with the highest wealth and the most valuable homes”. The sharpest objection is mechanical rather than moral. Professor Andy Summers of the Centre for the Analysis of Taxation calls it “just about the worst possible way to deliver an inheritance tax cut”, because exempting the home whatever its value will “encourage older people to concentrate their savings in their home, prevent downsizing, and so further gum up the housing market” — which is where the supply for first-time buyers comes from.