Badenoch pledges to exempt family homes from inheritance tax if the Conservatives win

For an owner-operator weighing succession this quarter, the first question is who made the promise. The Conservatives are still polling lower than at their 2024 defeat, the Guardian reported ^[9], and Badenoch warned in interviews that an early vote would produce a hung parliament ^[12]. She was candid about the gap. "People are looking through the shop window. They like what they see, but let's be honest, not enough of them are buying it," she said ^[10].

The party presents the measure as paid for, from spending cuts in areas such as welfare and international aid ^[21]. Those savings are shared. They also have to cover ending stamp duty on primary residences ^[21], repealing the mansion tax, childcare support for earners above £100,000 ^[5] and, according to shadow chancellor Andrew Griffith, abolishing the packaging tax ^[6]. Senior figures say half of the cuts would go to lowering borrowing ^[18]. Half of £70bn leaves about £35bn for every tax cut on the list ^[23]. Badenoch put the same condition on her wider goal. "My ambition is to abolish inheritance tax altogether, as soon as we can afford it," she told the conference in Birmingham ^[7].

The relief is drawn around the house. Badenoch's own summary promised "no inheritance tax on your home when you pass it to your children or grandchildren" ^[4]. For an owner whose estate sits mostly in a company, that exemption reaches only the house. The additional £1m for couples ^[2] is the part that could reach further. Neither report gives a cost for the inheritance tax measure or says whether that £1m could be set against shares in a family business.

Tax Justice UK put the objection plainly. "This is a reckless policy that will deprive public services of cash when they most need them," it said ^[13]. The party's answer is the savings pot, and that pot is already split several ways. The TUC's general secretary, Paul Nowak, said: "Cutting it would do nothing for ordinary people." ^[16] On Badenoch's own figures, fewer than 2.5% of families would still pay after the change ^[19]. The argument between the parties is about which families leave the tax. "The Tory party is looking after its own in Kensington, Reform is looking after the country," Reform's finance spokesperson, Robert Jenrick, said ^[15].

The pledge rewards holding the house until death. The Guardian reported fears that it could overheat the housing market by giving elderly homeowners a reason to stay in large family homes instead of downsizing ^[22]. In my view the right use of the pledge this quarter is as a guide to what a Conservative government would favour: the home, held to the end. The risk next quarter also runs the other way. Prime Minister Andy Burnham said Labour would campaign on a free-at-the-point-of-use care service, and economists warned he would have to raise taxes to fund it ^[17].