The Conservative Party has promised to abolish inheritance tax on the family home and raise the tax‑free threshold for couples by an additional £1 million if it wins the 2024 general election. The pledge was announced by policy chief Kemi Badenoch at the party conference in early 2024 and is being marketed as relief for middle‑class households in the south of England.
The timing is notable because the Treasury projects a £6 billion shortfall in revenue this year, according to analysis by The Guardian. The party hopes the promise will shore up its traditional base in key battleground constituencies, but the fiscal gap raises questions about how the cut will be financed and what impact it may have on public services.
Badenoch said the reform would eliminate inheritance tax on the family home and allow couples to pass on an extra £1 million tax‑free, effectively raising the existing nil‑rate band. The proposal echoes a pledge made by former chancellor George Osborne in 2007, which was abandoned during the financial crisis and subsequent coalition austerity measures. BBC Verify notes that the benefit would accrue mainly to households with sizeable property assets, where the exemption could save millions in duty.
Critics argue the measure is economically unsound. Economist Heather Stewart, writing for The Guardian, calls the plan a “gambit” that would shift the tax burden onto lower‑income households. Without a clear financing strategy, the loss of £6 billion would have to be covered by higher taxes elsewhere or cuts to public spending. The Treasury has not released a detailed plan or timeline for implementation, leaving the fiscal implications uncertain.
Supporters contend the reform could encourage inter‑generational wealth transfer and reduce the administrative burden on families. Evidence on housing‑market effects is limited; any price impact would depend on the scale of the tax advantage and broader market conditions. The policy’s focus on property owners highlights a broader trend of targeting tax relief toward voters in affluent southern constituencies, a strategy that could influence the election outcome.
The proposal sits within a long history of inheritance‑tax debates. Osborne’s 2007 plan was shelved after the 2008 financial crisis, and the current government has repeatedly signalled a willingness to adjust the nil‑rate band. The new pledge arrives just weeks before voters head to the polls, making it one of the most high‑profile tax proposals of the campaign.
As the election approaches, the Conservatives are expected to defend the plan as a fairness issue for families who have already paid income tax and national insurance. Opponents are likely to demand a transparent accounting of how the £6 billion gap will be addressed. The next step will be parliamentary scrutiny, where details of funding and implementation will be debated.