Treasury’s inheritance tax windfall to double in five years – as polling reveals public support for Kemi Badenoch’s plan to cut it

DAILYMAIL.COM • 5h ago

By JASON GROVES, POLITICAL EDITOR 22:41 08 Oct 2026, updated 00:20 09 Oct 2026

Inheritance tax receipts are set to double within five years, a report warned yesterday – as polling revealed public support for Tory plans to cut it.

A study by centre-Right think-tank Onward reveals the taxman is expected to take £15billion in inheritance tax by 2031 – up from £7billion last year – without urgent reforms.

Kemi Badenoch electrified the Conservative Party conference on Wednesday by unveiling radical plans to slash the hated levy.

Tory changes would exempt the family home from inheritance tax, regardless of its value.

Mrs Badenoch also announced plans to allow couples to pass on an additional £1million in assets tax-free, or £500,000 per person.

The Tory leader said the desire to pass on the family home ‘is one of the most human instincts of all’ and should not be preyed on by the taxman.

Polling by YouGov found the public backed exempting the family home by a margin of 61:18.

The survey of more than 6,000 adults last night found support strongest among Conservative and Reform voters, with 85 per cent of Tories in favour. But Lib Dem voters, who the Conservatives are trying to win over, backed the idea by 61:22 and even Labour supporters were on side by 48:30.

Critics have argued that the policy unfairly benefits voters in London and the south where house prices are higher. But the polling shows support in the north of 57:19.

The report by Onward reveals a sharp rise in the impact of inheritance tax. HMRC data shows that receipts rose to a record £7billion, partly as a result of a longstanding freeze in the threshold for paying it, which Labour has extended until at least 2031.

But receipts are due to rise even more quickly in the coming years because of other changes introduced by Labour, such as including farmland for the first time and pension pots from next year.

Inheritance tax receipts are now set to jump to £12.6billion by 2030, when an estimated 52,000 estates will be hit. This equates to around one in 12 of all estates – three times the proportion hit in 2009 when the current threshold was set.

The following year, revenues are expected to hit £15billion – double the current level.

Shadow Chancellor Andrew Griffith said: ‘Inheritance tax was meant to be a tax for the super rich. But it has ended up being a tax on Middle England. And under Labour, more and more families are being dragged into the net.

‘We have been clear: under the Conservatives there will be no stamp duty when you buy your home, no “Mansion Tax” when you live in it, and no inheritance tax when you pass it on to your family. And each couple will be able to leave a further £1million of inheritance free.

‘Our changes will take more than half of people currently liable for inheritance tax out of paying it altogether, and save many more families from paying it in the future. The Conservatives believe you should get to keep more of what you earn. Labour want to take more of your money and spend it on welfare.’

The Tory plans are forecast to cost £6billion a year, funded mainly by cuts to welfare.

But some economists warned the plan could end up costing significantly more if it incentivises older people to pile their assets into property.

Dan Neidle, of Tax Policy Associates, said it would create a ‘perverse incentive’ for older people to ‘upsize’ their property to avoid the tax, meaning the final cost was likely to be between £7.7billion and £10.9billion.

But Tory sources played down the warning, saying that most people with enough assets to be caught by the proposed thresholds are already using tax lawyers and accountants to shelter their wealth from death duties.

Under current rules, individuals can leave £325,000 in assets tax-free, with a further £175,000 if the family home is involved. Couples can leave a total of £1million before the taxman takes a slice.

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