Sunita Somvanshi
Kemi Badenoch used the final day of the Conservative Party conference to promise that a future Tory government would abolish inheritance tax on primary family residences, handing UK estate planning a new political variable. The pledge arrives days before the government is expected to deliver its own autumn budget and sets the clearest dividing line between the two parties on personal wealth taxation ahead of the next general election.
Badenoch announced that the Conservatives would exempt primary family homes from inheritance tax entirely. Under the proposal, couples passing on a main residence would benefit from an additional £1 million tax-free allowance on top of existing protections. The announcement was made at the Conservative conference on October 7. A full costing and the detailed eligibility conditions — which properties, ownership structures, and thresholds qualify — require the complete policy document rather than the conference speech alone.
For UK homeowners and families organizing estate planning, Badenoch's pledge carries no immediate legal or tax effect because the Conservatives are in opposition. Existing HMRC rules remain unchanged: estates face a 40% tax rate above the standard combined £1 million allowance for married couples passing on a primary residence. Families reviewing wills ahead of the government's upcoming fiscal budget should plan under current statutory thresholds rather than opposition policy pledges.
What the Current Rules Already Allow — and What the Proposal Actually Changes
Under current UK tax law, the standard nil-rate band is £325,000 per person, with an additional £175,000 residence nil-rate band available when passing a primary home to direct descendants. For a married couple or civil partners, these allowances combine to allow up to £1 million in property and assets to pass tax-free — a threshold introduced from 2017–18, reaching its current £175,000 level in 2020–21.
The proposal would abolish inheritance tax on family homes entirely and provide an additional £1 million allowance for couples. The existing £175,000 residence nil-rate band is withdrawn at a rate of £1 for every £2 that an estate exceeds £2 million in total value — a taper that strips away the allowance for the wealthiest family estates. Badenoch's proposal would remove that taper as part of the broader family-home exemption.
For the majority of UK households, HMRC data and current reporting show that around 5% of estates in any given year pay any inheritance tax at all. The existing £1 million combined threshold for married couples already protects most family homes from liability.
On the current UK inheritance tax threshold for family homes: the standard nil-rate band is £325,000, plus an additional £175,000 residence nil-rate band when passing a primary home to direct descendants. For a married couple or civil partners, these allowances combine, allowing up to £1 million in property and assets to pass tax-free.
The Autumn Budget is scheduled for 28 October 2026. Agricultural and business property relief reforms are already legislated under the Finance Act 2026. The gap between the parties on estate taxation is expected to remain a central campaign issue through the next election cycle.
Related coverage: Kemi Badenoch’s shadow cabinet leadership; HMRC revenue collection rules. For primary-source context, see HMRC inheritance tax manual.
