Badenoch unveils inheritance tax cut on family homes, prompting criticism of favouring wealthy

Conservative leader says couples will be able to leave an extra £1m tax-free, with plans to abolish inheritance tax entirely when affordable

By LineZotpaper

Published8 October 2026

Updated8 October 2026

Read Time3 min

Sources2 outlets

Kemi Badenoch has announced the Conservatives would abolish inheritance tax on family homes if elected, also allowing couples to leave an additional £1m tax-free to their families, a move immediately criticised as prioritising the wealthy over ordinary families. The Tory leader told the party conference in Birmingham that the number of families paying inheritance tax – currently less than 5% – would fall by more than half under the plan, which she said would be paid for from £70bn in savings the party has identified.

The announcement is the latest in a series of Conservative policy proposals aimed at affluent middle-class voters who abandoned the party at the last election. Other measures include support with childcare for those earning over £100,000 and repealing the mansion tax.

Badenoch framed the inheritance tax plan as a reward for hard work and saving. "My ambition is to abolish inheritance tax altogether, as soon as we can afford it," she said. "I believe the people who work hard and save should be rewarded for that effort." She added: "So 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."

But critics were swift to condemn the proposal. Tax Justice UK said in a statement: "Kemi Badenoch has just announced a massive inheritance tax giveaway to some of the wealthiest people in Britain. This is a reckless policy that will deprive public services of cash when they most need them."

Reform UK's finance spokesperson, Robert Jenrick, claimed the plan would affect only 2% of houses, the majority in London, adding: "The Tory party is looking after its own in Kensington, Reform is looking after the country."

Labour chair and cabinet minister Bridget Phillipson said: "The Tories haven't changed. Kemi Badenoch has shown that the Tories' choice is to do nothing to help ordinary families struggling with the cost of social care, prioritising the wealthiest instead."

TUC general secretary Paul Nowak called the policy "the same old Tory playbook: cutting taxes for their rich mates and leaving working people to pick up the bill." He noted that 95% of estates pay no inheritance tax, adding: "They are a party for inherited wealth, not workers."

The policy also raises concerns about overheating the housing market, as elderly homeowners may be incentivised to remain in large family homes rather than downsize.

Analysis

Why This Matters

The inheritance tax cut directly affects the wealthiest homeowners, potentially reducing revenue for public services at a time of fiscal strain.
It signals the Conservatives' strategic focus on winning back affluent voters in southern England, a key electoral battleground.
The plan could exacerbate housing market pressures by encouraging older people to stay in large homes rather than downsizing.

Background

The announcement was made at the Conservative party conference in Birmingham, part of a series of tax-and-spending pledges by Kemi Badenoch since becoming leader. Inheritance tax is currently paid by fewer than 5% of estates, mostly on properties above the nil-rate band. The Conservatives have identified £70bn in savings to fund the policy, though opponents dispute the viability of those savings.

Key Perspectives

Conservative leadership: Argues the policy rewards hard work and saving, and is a step toward full abolition of inheritance tax when affordable. Opposition parties and unions: Contend the tax cut benefits only the wealthiest, depriving public services of needed funds, and that the party is prioritising its traditional base over ordinary families. Critics and housing experts: Warn the policy could distort the housing market by reducing the incentive for elderly homeowners to downsize, potentially overheating prices.

What to Watch

Whether the Conservatives cost the £70bn savings plan and how the policy is received by voters in key southern English constituencies.
Labour's response and whether it develops a counter-proposal on social care funding or inheritance tax.
Housing market data: any signs of increased reluctance among older homeowners to sell or downsize.

Sources

Tories accused of prioritising rich voters as Badenoch lays out inheritance tax cut plan — UK news | The Guardian
Tories accused of prioritising rich voters as Badenoch lays out inheritance tax cut plan — World news | The Guardian