Conservative leader Kemi Badenoch has announced plans to exempt family homes from inheritance tax if her party wins the next general election. The proposals, outlined at the Conservative Party Conference, would eliminate inheritance tax on primary residences and provide couples with an additional £1 million allowance exempt from the levy.
Ms Badenoch stated, “The next Conservative Government will legislate so nobody will ever pay inheritance tax on their family home,” adding that she aims to abolish inheritance tax entirely when fiscally viable. She indicated that the proposed changes would reduce all inheritance tax bills and cut the number of families paying the tax by more than half.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, noted that the inheritance tax commitment “will be welcomed by homeowners and families planning for the future.” He added that for many households, the family home represents their most significant asset, making certainty around succession planning important. Mr Douglas cautioned that implementation details would be critical, stating that any changes must be “clear, workable and considered alongside the wider taxation and housing policy landscape.”
The current inheritance tax system applies a 40% rate on estates above £325,000, with additional allowances available when passing on a main residence to direct descendants. The proposals also form part of a broader property taxation package that includes commitments to eliminate stamp duty on primary home purchases and rule out any mansion tax on occupied properties.