Kemi Badenoch's proposed inheritance tax policy is estimated to cost £6bn of taxpayer money. The plan would allow a couple to pass on their entire family home, regardless of its value, and an additional £1m in other assets without incurring inheritance tax.
HMRC data for 2023/24 indicates that less than 5% of estates were liable for inheritance tax under current rules. Arun Advani, from the Centre for the Analysis of Taxation at the University of Warwick, suggests the biggest beneficiaries would be in areas with expensive housing, potentially making it harder for young working families to upsize.
Total revenue from inheritance tax is forecast to be around £9bn this year, rising to £15bn by 2030-31. Badenoch's plan is projected to reduce this by approximately half.