A central campaign pledge in the making
Conservative Party leader Kemi Badenoch is preparing to make the abolition of inheritance tax a cornerstone of her electoral strategy, according to reports from City AM. The potential policy, which could be formally unveiled at the party’s upcoming conference, aims to draw a sharp dividing line between the Conservatives and their political rivals ahead of the next general election.
Inheritance tax is currently levied at 40 per cent on estates exceeding a £325,000 threshold, though various exemptions for family homes and spousal transfers often reduce the number of estates subject to the tax. Data suggests that fewer than five per cent of estates currently pay the levy, leading critics to label the proposed abolition as a targeted, rather than universal, economic giveaway.
The political and fiscal divide
The proposal has already drawn fire from Reform UK, specifically from their shadow chancellor, Robert Jenrick. Jenrick dismissed the plan as a “desperate play,” arguing that the Conservative Party has previously failed to deliver on similar promises. He highlighted that the party has historically collected significant revenue from what he termed “death taxes,” suggesting voters would be wary of renewed pledges.
In contrast, Reform UK is promoting a strategy centered on increasing the personal tax-free allowance to £15,000. Jenrick claims this policy would provide a direct financial benefit to 40 million people, saving the average taxpayer approximately £500 annually. To underscore his commitment, Jenrick has pledged to resign if he fails to deliver this specific tax cut in his first budget, a move designed to contrast his approach with the perceived caution of traditional party politics.
Stakes for the electorate
The debate over inheritance tax has gained urgency following recent regulatory changes, including the inclusion of unused pension wealth in the scope of inheritance tax starting in April 2027. Recent research from Rathbones indicates that these tax considerations are already influencing significant life choices, with over two-thirds of surveyed grandparents stating that inheritance tax impacts their decisions regarding funding for their grandchildren’s education.
While Badenoch’s team reportedly views the Labour Party as “weak on the economy” and intends to use aggressive tax-cutting rhetoric to gain momentum, the Conservative policy platform remains officially unfinalized. A party spokesperson confirmed that while Badenoch has expressed a clear desire to reduce taxes, including inheritance tax, no formal decision has been reached regarding the final election manifesto.