What's in the Conservatives' inheritance tax plan and who benefits?
Summary
The Conservative Party plans to change inheritance tax if it wins the next UK general election. The new plan would raise the tax-free allowance from £325,000 to £500,000 and completely exempt a family home from inheritance tax, mainly benefiting wealthier households.Key Facts
- Currently, inheritance tax is 40% on estates worth over £325,000.
- Couples can combine allowances, potentially leaving £1 million tax-free with current rules.
- The Conservatives want to raise the threshold to £500,000 and remove tax on family homes.
- About 5% of UK deaths in 2024-25 will have estates paying inheritance tax, roughly 30,400 cases.
- Experts expect the number of taxable estates to rise to over 50,000 by 2029-30 due to rising home values.
- The Conservative plan could reduce taxable estates to around 22,000 by 2030.
- The policy is estimated to cost £6 billion per year by 2029-30.
- Wealthier estates use legal methods to lower tax payments, paying less than the full 40% rate in practice.
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