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Badenoch Proposes Scrapping Inheritance Tax If Tories Win

By Drooid · Sep 16, 2026, 10:06 AM UTC · How we work

Summary

Story summary

Conservative leader Kemi Badenoch proposes scrapping inheritance tax if Tories win the next election.
Inheritance tax levies 40% on estates above the £325,000 threshold.
Fewer than five percent of estates pay, generating about £9 billion annually.
Institute of Economic Affairs and TaxPayers’ Alliance say the levy is distortionary, unfair, and uncompetitive.
Public support for abolishing inheritance tax rose to 54% in 2026, up from 49% the year before.

History

Historical Context

The 1986 Finance Act, championed by Prime Minister Margaret Thatcher, replaced the former estate duty with a 40% inheritance tax on estates above £325,000. In its first decade, the Treasury collected roughly £9 billion annually, while only about five percent of estates actually paid the levy. Today, Conservative MP Kemi Badenoch echoes Thatcher’s market-friendly rhetoric, urging the party to scrap the tax, a stance echoed by the Institute of Economic Affairs and the TaxPayers’ Alliance. If abolished, the policy could reduce annual fiscal receipts by billions, reshaping wealth distribution debates and prompting future governments to seek alternative revenue sources.

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Story summary

Conservative leader Kemi Badenoch proposes scrapping inheritance tax if Tories win the next election.
Inheritance tax levies 40% on estates above the £325,000 threshold.
Fewer than five percent of estates pay, generating about £9 billion annually.
Institute of Economic Affairs and TaxPayers’ Alliance say the levy is distortionary, unfair, and uncompetitive.
Public support for abolishing inheritance tax rose to 54% in 2026, up from 49% the year before.

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