Today, the Conservative Party has announced that we will abolish Inheritance Tax on the family home and raise the individual threshold to £500,000. This will mean that a couple can pass on their main home to direct descendants inheritance tax free, and a further £1,000,000 to anyone without any inheritance tax liability.
This will replace the current thresholds of £325,000 per person, and a £175,000 further allowance for residential property.
IHT is a bad tax. It is morally wrong and a form of double taxation to take assets that people have purchased with income – which has already attracted tax – and then force them to pay even more to the state just because they have died. The really wealthy have always set up trusts, or taken other steps to shelter assets from Inheritance Tax.
The Conservatives want to protect families who work hard and save, and want to make sure that the next generation benefit from their efforts. This is a contrast with Labour, who are widening the IHT net including by sucking in family farms, pensions and family businesses.
We have already pledged to scrap Labour’s family farm tax and the family business tax, but today we are going further.
Explosive house price growth over the past thirty years has turned Inheritance Tax into a postcode lottery. Perfectly normal houses that were purchased decades ago will now be worth enough to drag families into the IHT net.
We want to abolish inheritance tax altogether. But as an initial, and fully costed, first step, we are announcing these changes that the next Conservative Government will introduce. Unlike Labour and Reform, who both make billions of pounds of unfunded spending promises, we are the only party that takes the public finances seriously. We will legislate to implement this change.
Kemi Badenoch MP, Leader of the Conservative Party, said:
“The Conservatives are and always have been the party of home ownership. We understand why putting roots down and having a stake in society matters.
“Our homes are where we watch our children take their first steps. They are where we gather every Christmas to put up the same decorations. Passing on your home to your family is one of the most human instincts of all.
“That is why the next Conservative government will legislate so nobody will ever pay Inheritance Tax on their family home.
“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. That is what the next Conservative government will deliver.”
Andrew Griffith MP, Shadow Chancellor, said:
“Inheritance Tax is an immoral tax which punishes people simply for working hard, saving and leaving something behind for their children. As a first step towards abolishing the tax completely, we will scrap Inheritance Tax on the family home and lift the threshold for other assets to a million pounds for a couple.
“We are able to make this commitment because of the detailed plans we have set out to grip public spending, especially the out-of-control welfare bill which is ballooning on Labour's watch. Unlike other parties we will only make promises we know we can afford to keep. The Conservatives will deliver lower and fairer taxes, back aspiration and support hardworking families.”
