Inheritance tax is likely to be abolished if Kemi Badenoch becomes Prime Minister, party sources have told the Mail on Sunday.
The move – which the sources said will happen if ‘the sums can be made to add up’ – would strike a powerful contrast with the array of new taxes being imposed by Labour.
Last week Prime Minister Andy Burnham announced plans to impose a £1.6billion ‘tourist tax’, which would hit Britons holidaying in the UK with a 5 per cent surcharge – the latest in a raft of rises to tax and National Insurance since Labour’s 2024 general election victory.
Inheritance tax is charged at 40 per cent on estates over the standard tax-free threshold of £325,000, although the exempted amount can rise to £1million when the main home is passed on and married couples transfer their allowances between themselves.
Scrapping IHT would cost an estimated £9billion, with the funds most likely to be found from cutting the spiralling welfare bill.
The move could be announced at the Tory party conference in Birmingham next month, although sources close to Ms Badenoch said they had ‘not decided our policy platform yet’.
It would have echoes of George Osborne’s announcement at the Tories’ 2007 party conference that a future Conservative government would raise the IHT threshold from £300,000 to £1million.
Sources have said inheritance tax is likely to be abolished if Kemi Badenoch (pictured on September 11, 2026) becomes Prime Minister
Burnham (pictured on September 10, 2026) announced plans to impose a £1.6billion ‘tourist tax’ that means Britons holidaying in the UK would be left with a 5 per cent surcharge
The surge in support that followed heavily influenced Gordon Brown’s decision to ‘bottle’ a snap election that autumn.
Given the Tory Party is currently unprepared for an election, many of Ms Badenoch’s aides hope that such a policy would deter Mr Burnham from calling an early election himself.
Last year, Mrs Badenoch successfully kept her plans to axe stamp duty secret ahead of her conference announcement – a move credited with shoring up her leadership.
Senior sources in Mrs Badenoch’s office have told the MoS they want conference to create a ‘sense of momentum’ following on from a successful Tory shadow ministerial re-shuffle.
Mrs Badenoch has already said abolishing the ‘death tax’ is ‘high on my list’ and last week she said she commissioned internal research to see whether it is affordable – because ‘we are the party of fiscal responsibility’.
A source said: ‘Abolition is high on Kemi’s policy wish-list, but will only happen if we can make the sums add up’.
Her new Shadow Chancellor, Andrew Griffith, has also made no secret that he hates the levy.
Last year he told the TaxPayers’ Alliance: ‘I was asked at my selection, what’s the single tax, if you ever had a chance to scrap? And it’s inheritance tax.’
And in August, four days before his promotion, he said Britain can ‘learn from’ Sweden after they scrapped inheritance tax.
A poll for the Adam Smith Institute showed significant support for cutting IHT. It showed 45 per cent of Britons oppose inheritance tax and only 25 per cent support it in its current form.
John O’Connell, chief executive at the TaxPayers’ Alliance said: ‘Inheritance tax is one of the most unfair and hated taxes on the books, punishing families for saving, investing and building something to pass on. Scrapping it would send a powerful signal that Britain wants to reward aspiration rather than tax people again after death.’
And James Lawson, chairman of the Adam Smith Institute, called for ‘abolition’. He said: ‘We welcome this bold and growth-boosting announcement. The Adam Smith Institute has made the case against the death tax for the best part of 50 years.
‘Inheritance tax does a great deal of damage for very little money. It raises less than 1 per cent of the total tax take. It forces panic sales of family businesses, farms and homes.It falls hardest on family firms, whose owners cannot simply sell shares to pay the bill. And it taxes income that has already been taxed. The British public have never accepted it. Abolition is long overdue.’
A Conservative spokesman said: ‘We have not decided our policy platform for conference and anyone claiming they know what we’re announcing clearly has nothing to do with the planning.
‘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.
‘But, unlike Reform, the Conservatives do not announce policies unless they are fully costed, backed up by specific savings, and in line with our Golden Economic Rule.’
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