No inheritance tax on family home, Badenoch tells conference

Jacob Grattage, Reporter, Business & Accountancy Daily. Croner.

Leader of the Conservatives Kemi Badenoch wants to cut all inheritance tax bills and allow couples to pass on an additional £1m tax free.

Speaking at the last day of the Conservative party conference in Birmingham, leader of the opposition, Kemi Badenoch, has promised sweeping tax cuts if elected at next general election, telling delegates: ‘No stamp duty when you buy your home, no mansion tax when you live in your home, no inheritance tax on your home when you pass it on’.

Rumours in the hours before speech that the Conservative leader wanted to completely scrap inheritance tax were quickly squashed, when Badenoch took to the stage stating: ‘We are not abolishing inheritance tax at this conference, I’m sorry, I know you are disappointed’.

She continued: ‘But, just because I can’t give you everything you want, doesn’t mean I can’t give you anything you want’.

Perhaps with a mind to a possible snap election, and against a backdrop of tricky polling numbers, Badenoch said: ‘The next Conservative government will legislate so nobody will ever pay inheritance tax on a family home.’

Met with applause and cheers, she continued: ‘The Labour party think it is selfish to pass on what you have earned… inheritance tax was supposed to be a tax on the super wealthy, but they have all gone, instead it is now a tax on middle class families in every corner of our country.’

As the applause died down, the Badenoch said: ‘But that’s not all, couples will be able to leave an additional £1m tax free, these changes mean every inheritance tax bill will be cut, and the number of families paying inheritance tax will fall by half.’

However, the Conservatives did not immediately provide further details on how any of this would be funded, and it was not clear from the speech whether the proposed additional £1m tax-free allowance would apply per couple, per estate, or through another mechanism. It also left questions about how it would affect single people, or would only be targeted at families.

While stopping short of abolishing inheritance tax, Badenoch reiterated her long-term goal, saying: ‘My ambition is to abolish IHT all together…as soon as we can afford it.’

The much hated farm tax also came up in the speech, with reassurances for rural voters when Badenoch said a Conservative government would ‘end the family farm tax’, effectively overturning Labour’s sweeping changes to agricultural and business property relief that have sparked such a backlash from farmers and owner managed businesses.

Employer’s national insurance for young workers

Badenoch also unveiled plans aimed at younger workers, stating: ‘Young people are leaving university into the worst graduate recruitment market on record, with a mountain of debt. They can’t buy a house; they can’t get a job’.

She also said the party would reduce student loan interest rates and plans to ‘cut the jobs tax in half for under-25s’, saying the measure would make it easier for employers to hire younger workers.

‘That is how you get young people into work, by making it easier to hire them. That is the right way’, Badenoch said.

In a speech surprisingly filled with tax references, the opposition leader also said the complex tax code should be overhauled, pointing out that the length of the legislation is now more than 35,000 pages, and called for ‘urgent simplification’.

For more coverage of the party conferences, go to our Politics section