Tories pressure Labour to take an axe to public spending to fund major cut to ‘immoral’ inheritance tax
The Conservatives are urging Labour MPs to back a motion to exempt family homes, farms and businesses from inheritance tax, arguing the levy is unfair and should be cut. The debate is intended to increase pressure on Labour ahead of the Budget and give the Tories a clear dividing line on tax and public spending.
Kemi Badenoch has pledged to raise the inheritance tax threshold to £500,000 if the Conservatives return to government, which the party says would more than halve the number of families paying it and allow couples to pass on an extra £1 million tax-free. The existing threshold is £325,000, with a higher allowance when a main home is left to direct descendants; the Tories estimate their proposals would cost about £6 billion in 2029-30, funded partly by welfare cuts and spending reductions.
- Tories want inheritance tax cut for homes, farms and businesses.
- The party estimates the plan would cost £6 billion by 2029-30.
- Proposed welfare and spending cuts would help fund the changes.
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Inheritance tax is charged on some estates after someone dies. The standard threshold is £325,000, with an additional allowance when a main home is passed to children or other direct descendants; rules for farms and businesses also affect which estates pay.
The Conservatives, led by Kemi Badenoch, want to raise the threshold to £500,000 and exempt family homes, farms and businesses. They say this would reduce the tax bill for many families, while Labour faces pressure over whether to support changes before the Budget.
The Conservatives estimate their proposals would cost about £6 billion in 2029-30 and say this should be met partly through welfare and other spending cuts. The debate is part of a wider argument about how much the state should spend and who should pay tax.
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The case for
Supporters argue inheritance tax can force families to sell or restructure homes, farms and businesses built from income that has already been taxed, making the levy unfair and disruptive to passing assets between generations. Raising the threshold or exempting family assets could protect family continuity and give people greater certainty about what they can leave their children.
The case against
Opponents argue a broad tax cut costing about £6 billion a year would chiefly benefit people with substantial estates, while requiring welfare or other public spending cuts that could fall on people with greater need. They see inheritance tax as a way to limit the concentration of wealth across generations and raise revenue for public services, and would question whether the proposed exemptions are a fair use of public funds.