Inheritance tax faces axe if Kemi Badenoch wins next election

By the Editorial Team · Sunday, September 13, 2026

Senior Conservative figures indicate that Kemi Badenoch may announce plans to abolish inheritance tax if she becomes Prime Minister, pending financial assessments. This policy shift, contrasting sharply with recent Labour tax increases, could cost the government £9 billion and reshape the upcoming election debate on fiscal priorities.

Inheritance tax could be abolished if Kemi Badenoch becomes Prime Minister, according to senior Conservative Party sources. The move, which would represent a stark contrast to the new taxes introduced by the Labour government, is under consideration and may be announced at the upcoming Conservative Party conference in Birmingham next month.

Inheritance tax, currently levied at 40 percent on estates exceeding a threshold of £325,000—rising to £1 million for main homes passed to direct descendants or through married couples’ combined allowances—would be scrapped if the party can reconcile the financial implications. This proposal would potentially cost the government an estimated £9 billion in revenue, with the funding likely to come from reductions in welfare spending.

Sources close to Badenoch have stated that the policy platform for the conference has not yet been finalized, but abolition of inheritance tax remains high on her agenda. Badenoch commissioned internal research to examine the fiscal viability of eliminating the tax, emphasizing the need to maintain fiscal responsibility. Her stance follows a successful shadow ministerial reshuffle aimed at building momentum within the party.

Andrew Griffith, the newly appointed Shadow Chancellor, has also expressed strong opposition to the inheritance tax. In previous statements, he praised Sweden’s decision to abolish the tax and described inheritance tax as a candidate for removal. Their combined position signals a push within the Conservative leadership toward dismantling this levy.

The inheritance tax has been contentious for many years. Critics argue it penalizes family savings and investments, particularly impacting family businesses, farms, and homes. Supporters of abolition point to polling data, such as a survey by the Adam Smith Institute showing 45 percent of Britons oppose the tax, with only 25 percent in favor. John O’Connell, chief executive of the TaxPayers’ Alliance, described the tax as "unfair and hated," while James Lawson, chairman of the Adam Smith Institute, called abolition "long overdue," citing the tax's limited revenue contribution—less than 1 percent of total tax receipts—and its negative effects on family-owned enterprises.

Labour, meanwhile, has pursued a different fiscal approach since its 2024 general election victory. Prime Minister Andy Burnham recently announced a £1.6 billion “tourist tax” on domestic holidaymakers alongside other tax and National Insurance increases, highlighting the contrasting priorities between the two major parties.

A Conservative spokesperson cautioned that no final decisions on tax policies would be made prior to the conference. They reiterated the party’s commitment to ensuring any tax changes are fully costed and consistent with the “Golden Economic Rule,” under which borrowing is limited to investment spending.

The inheritance tax issue is likely to remain a key point of debate in the run-up to the next general election, with some analysts suggesting that a bold tax cut could alter the political landscape and influence Labour’s election timing decisions.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.