Kemi Badenoch, the Conservative party leader, has confirmed that she is exploring methods to eliminate inheritance tax, a move she believes would alleviate the financial strain on middle-class families. This confirmation comes as Badenoch engages in a political debate, particularly with Reform UK, regarding tax policy priorities.
Badenoch stated her intention to help "ordinary families build generational wealth," signaling a potential policy announcement at the upcoming Conservative party conference in Birmingham. This aligns with previous discussions within the party, including remarks from Shadow Chancellor Andrew Griffith, who identified inheritance tax as a levy he would prioritize for removal.
"The people caught by inheritance tax are mostly home-owning middle-class families due to house price inflation, diligent savers, and small-business owners," Badenoch said in a social media post. She contrasted this with the wealthy, who she argued "can afford trusts and sophisticated tax planning or move abroad."
She directly addressed a statement from Reform's Robert Jenrick, who suggested it was "morally wrong" to prioritize cutting inheritance tax over assisting low earners. Badenoch countered, stating, "I think it is morally wrong to punish people for doing the right thing – spending a lifetime working, saving, building up a business or a home to pass on to the next generation."
Badenoch also criticized Reform UK's donors, including cryptocurrency tycoons, suggesting they are less affected by inheritance tax due to offshore holdings or investments in assets like cryptocurrency. She asserted that the Conservative party sides with "millions who have paid their dues" and wish to pass on their assets to their children or communities.
However, the potential abolition of inheritance tax has drawn criticism. Jenrick argued that given the state of public finances, prioritizing assistance for the wealthiest 5% through inheritance tax cuts would be less beneficial than raising the tax-free personal allowance to aid 97% of workers. Additionally, there are reports of other potential "death tax" proposals, such as a 10% levy on a majority of households to fund social care, though this has been ruled out by some political figures.
Badenoch emphasized that any policy announcement regarding inheritance tax would only be made after a "clear plan" is developed, ensuring it is "fiscally responsible."