The move would be paid for by slashing the benefits bill
Kemi Badenoch (Image: Getty Images)
Kemi Badenoch is eyeing-up abolishing Inheritance Tax if she becomes Prime Minister, according to reports. The Tory leader will get rid of Britain’s most hated tax if “the sums can be made to add up”.
Scrapping IHT would cost an estimated £9billion, with the funds most likely to be found from cutting the spiralling welfare bill. Such a bold move would strike a significant dividing line with Labour and Reform UK. Inheritance tax is charged at 40% on estates over the standard tax-free threshold of £325,000.
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Kemi Badenoch (Image: Getty)
The exempted amount can rise to £1million when the main home is passed on and married couples transfer their allowances between themselves.
Mrs Badenoch could announce the policy at the Tory party conference in Birmingham next month.
It is understood that the party wants to continue its strong momentum of the past 12 months.
She has already said abolishing the “death tax” is “high on my list” and last week she said she commissioned internal research to see whether it is affordable.
Last year, Mrs Badenoch announced eyecatching plans to axe stamp duty at the Conservative Party’s annual gathering in Manchester.
Another “wow” moment would help put her party on a stronger footing if Andy Burnham decides to call a snap general election.
A source told the Mail on Sunday: “Abolition is high on Kemi’s policy wish-list, but will only happen if we can make the sums add up.”
Her new Shadow Chancellor, Andrew Griffith, has also made no secret that he hates the levy.
Last year he told the TaxPayers’ Alliance: “I was asked at my selection, what’s the single tax, if you ever had a chance to scrap? And it’s inheritance tax.”
And in August, four days before his promotion, he said Britain can “learn from” Sweden after they scrapped inheritance tax.
A poll for the Adam Smith Institute showed significant support for cutting IHT.
It showed 45% of Britons oppose inheritance tax and only 25% support it in its current form.
John O’Connell, chief executive at the TaxPayers’ Alliance said: “Inheritance tax is one of the most unfair and hated taxes on the books, punishing families for saving, investing and building something to pass on. Scrapping it would send a powerful signal that Britain wants to reward aspiration rather than tax people again after death.”
Gordon Brown (Image: Getty)
James Lawson, chairman of the Adam Smith Institute, said: “We welcome this bold and growth-boosting announcement. The Adam Smith Institute has made the case against the death tax for the best part of 50 years.
“Inheritance tax does a great deal of damage for very little money. It raises less than 1 per cent of the total tax take. It forces panic sales of family businesses, farms and homes.It falls hardest on family firms, whose owners cannot simply sell shares to pay the bill.”
If Mrs Badenoch decides to pull the trigger it would have echoes of George Osborne’s announcement at the Tories‘ 2007 party conference that a future Conservative government would raise the IHT threshold from £300,000 to £1million.
The surge in support that followed heavily influenced Gordon Brown’s decision to “bottle” a snap election that autumn.
A Conservative spokesman said: “We have not decided our policy platform for conference and anyone claiming they know what we’re announcing clearly has nothing to do with the planning.
“Kemi has made no secret of her desire to cut taxes, singling out inheritance tax as one of those taxes she wants to cut in a speech last week.
“But, unlike Reform, the Conservatives do not announce policies unless they are fully costed, backed up by specific savings, and in line with our Golden Economic Rule.”
Reform UK’s shadow chancellor, Robert Jenrick, said: “The Tories said they’d cut inheritance tax before, only to seize 84 billion pounds from grieving families in death taxes. We’ve heard this desperate play, and people won’t be fooled again.
“Reform would make a different choice. Instead of a tax cut for the wealthiest 5% of families, Reform will give 40 million people a tax cut of £500 a year and stop the state pension being taxed by raising the tax-free personal allowance to £15,000. And unlike career politicians in the Tory party, I’m willing to put my job on the line and resign if I don’t deliver this in my first budget.”