Kemi Badenoch has announced that the Conservative Party will scrap inheritance tax on family homes if it wins the next general election.
The pledge, delivered in her main conference address, stops short of full abolition, with other property and savings remaining subject to inheritance levies.
Badenoch described ending the tax entirely as her “ambition,” arguing the levy now unfairly hits middle class families who have worked hard to build wealth.
Couples will also be “able to leave an additional £1m pounds tax-free” to their families under the proposed new regime.
Party officials estimate the reform will cost £6bn, based on research conducted by Oxford Economics, and a Conservative spokesman suggested there could also be growth effects from the tax cut.
The changes would remove approximately 60 per cent of estates from paying inheritance tax altogether, offering significant relief to millions of homeowners.
Under current government plans to freeze thresholds, around 16 per cent of estates will face the tax by 2030, a figure the Conservatives say justifies urgent reform.
Badenoch framed the announcement within a broader economic offer, saying her party was drawing clear dividing lines ahead of the next election.
“I told you that a fight was coming,” Badenoch said. “Every day, the choice at the next election is becoming clearer. It will be between a Labour party which takes more of your money, or a Conservative party which lets you keep more of what you earn.”
The Conservatives have already pledged to cut spending on welfare and international aid by some £70bn, and have committed to ending stamp duty on primary residences.
Shadow chancellor Andrew Griffith said the Tories would also abolish the packaging tax and back expansion of a third runway at Heathrow Airport.
Senior figures have emphasised that tax cuts would only proceed once spending savings were identified, with half of cuts set to be reallocated toward reducing borrowing.
Prime Minister Andy Burnham last week said Labour would campaign on creating a free-at-the-point-of-use care service, with economists warning tax rises would be needed to fund it.
Burnham also indicated Labour would look to drop the triple lock pension, which allows state pension rises to significantly outpace wage growth over time.
Reform UK has said it would deliver £50bn in welfare savings to raise the tax-free personal allowance to £15,000, while the Liberal Democrats argue rejoining the single market would unlock sweeping tax cuts.
City AM and Freshwater Strategy polling last month showed the Tories trailing Labour by as many as six percentage points on voting intentions.
Badenoch said she had reformed the Conservatives into a “no nonsense party,” with “drama queens” having departed for Reform UK following the party’s heavy 2024 election defeat.
She quipped that senior Reform figures were “measuring up the curtains for their prison cells” and criticised Suella Braverman for “openly questioning people’s identity.”
Badenoch warned in Thursday interviews that the country risked a hung parliament if an early vote were called, while both Conservative and Reform leaders insisted they had no interest in forming a coalition.