Katie Williams
Live reporter

Image source, Getty Images

Conservative leader Kemi Badenoch has pledged to reform inheritance tax as she closed the Conservative Party conference in Birmingham today.

She said her party would scrap the tax on family homes altogether, and increase the tax-free threshold to £500,000 for the rest of a person's estate – meaning couples could pass on £1m without tax, as well as the family home.

Here's an explainer on how inheritance tax works.

Political opponents have criticised the speech for "prioritising the wealthiest", but our correspondent says it went down well in the room, ticking off key Tory themes like tax cuts, law and order and defence.

The question now is how the party's message will land with the public beyond the conference centre walls, with the Conservatives yet to recover in the opinion polls following the 2024 election.

Badenoch's speech compared her party to Marks & Spencer, a shop which she says is now "back in fashion".

"Just like M&S, we must learn from our mistakes, win back trust and make people feel good about our party again," she said.

We're now bringing our live coverage to a close, but you can read more in our story.

Government figures show that inheritance tax generated £7.03bn for the UK during the 2023/24 tax year.

The numbers state 4.72% of UK deaths resulted in an inheritance tax charge for the same period, with the tax being payable on fewer than one in 20 estates.

Earlier this afternoon, Chris Philp said that despite the tax affecting less than 5% of estates, there were often "multiple beneficiaries" of a given estate.

The shadow home secretary told Radio 4's World at One programme this meant the Conservative proposal to cut inheritance tax would have a "more widespread" impact than the 5% figure implied.

Image source, EPA/Shutterstock

During a media briefing, a Conservative party spokesperson was asked whether the change in inheritance tax would incentivise older people to stay in their family home and not downsize, so reducing the supply of houses for younger people,

The spokesperson said the party believed any such effect would be "counterbalanced" by their plan to scrap stamp duty which is paid by buyers of homes in England and Northern Ireland.

Official figures show that in the 2022 to 2023 tax year 4.6% of deaths resulted in inheritance tax being paid.

Damian Grammaticas
Political correspondent

Briefing journalists after Kemi Badenoch announced the inheritance tax policy, a Conservative spokesperson said the "£175,000 additional threshold for the family home, we've effectively taken back to infinity", so a family home of any value would be taken "completely out" of the tax.

In addition, the individual allowance would increase from £325,000 to £500,000. It would mean a couple would have a combined allowance of £1 million as well as their home being free of inheritance tax.

The spokesperson explained that, as is the case under the current rules, the unlimited allowance would only apply to one residence which would have to be your main family home. It also has to be passed to your children, grandchildren or any child you have fostered or adopted.

Conservatives estimate the policy would cost around £6bn a year. They believe they have identified £71bn worth of savings that can be made to government spending, including £36bn a year from welfare cuts.

The spokesperson said the fact the Labour government is freezing inheritance tax thresholds meant more people are "being sucked into this tax", and that by the 2029 to 2030 tax year around 9.5% of all individuals dying would be affected, meaning 16% of families would be in scope for inheritance tax.

"We're love-bombing the country," the Tory party leader told BBC Newsnight's Nick Watt, when he asked if her announcement on scrapping inheritance tax was essentially "love-bombing" the prosperous Home Counties to the exclusion of other parts of the UK.

"The Conservative Party is the party for everyone who wants a better country, who wants to work hard and get on," Kemi Badenoch told the BBC, external.

"It doesn't matter whether you're retired, earn £10,000, [or] £50,000, [or] £100,000.

"We are the party for everyone who wants to get on."

Image source, Reuters

The Tory's political opponents, as well as the Trades Union Congress (TUC), have responded to Kemi Badenoch's speech today.

• Bridget Phillipson accused the Tories of "prioritising the wealthiest" over ordinary families, with the Labour chairwoman saying the opposition party would not take the country the "right way"
• Reform UK leader Nigel Farage said Badenoch's speech "confirmed what we already knew", saying she has no vision for the country, as his party's economic spokesman said the Tories were "for the 2%"
• Ed Davey, the Lib Dem leader, branded Badenoch's plans as "Trussonomics 2.0", saying British people were "sick to death" of paying the price for the Tories' financial failure
• Green MP Carla Denyer said the Conservatives' measures on inheritance tax and welfare showed it is a party "working for the wealthy few", while also calling for action on the climate crisis
• The leader of the Trades Union Congress (TUC) Paul Nowak said the "vast majority" of people will never have to worry about inheritance tax, adding they would be more worried about proper NHS funding and keeping streets clean

Tories hope electoral space opening up for thempublished at 15:34 BST

15:34 BST

Chris Mason
Political editor, speaking on BBC Radio 4

The Conservatives hope that, given where politics is right now, the appeal that Andy Burnham and Labour are making broadly to the left might open up some space for them to try to appeal again to people in the 70 odd seats that the Liberal Democrats poached primarily from them at the last general election.

They also think that Reform UK are hitting a significant bump in the road.

Kemi Badenoch was abundantly clear in her speech that she essentially cannot stand Reform.

Reform don't appear to be disappearing, though. Even if they are not the force they once were in opinion polls, it is still looking like they are going to command a significant minority of the electorate.

So how do those numbers shake out after an election?

This is now very much a party in Kemi Badenoch's imagepublished at 15:25 BST

15:25 BST

Chris Mason
Political editor, speaking on BBC Radio 4

The thing I take away having just left the conference hall is that this is now very much a party in Kemi Badenoch's image.

It is a party absolutely united around her, with no talk of any threat to her leadership. But it is a work in progress – the numbers in the opinion polls don't lie.

The inheritance tax announcement does not mean scrapping the tax – that's the key thing to establish. The Conservatives make an argument that they'd love to do that, but they don't think it's affordable.

What they are saying is that people would be able to pass on a family home without that falling within the remit of the tax – the implication being that it wouldn't matter how much that property is worth.

There was also an extra £1m allowance pledged for couples.

Badenoch thinks these measures would halve the number of people paying the tax.

Fewer than one in 20 estates currently fall within the remit, but it is a deeply, deeply unpopular tax.

The Conservatives have released further details on their proposals to overhaul inheritance tax.

As we've mentioned, people would be allowed to pass on their family home without paying the tax under the plans.

The individual threshold would be raised to £500,000, allowing a couple to pass on £1m of assets, on top of their home, to their descendants without paying the tax. (This would replace the current individual threshold of £325,000 and additional £175,000 allowance for residential property.)

The new policy is estimated to cost around £6bn in 2029/30, the Conservatives say, citing analysis from Oxford Economics

It would take most estates out of paying the tax altogether, with the number of payers cut from 52,100 to 22,000 in 2029-30, the Tories say, citing Oxford Economics analysis.

The Conservatives say the measures would be paid for by savings made elsewhere.

Brian Wheeler
Reporting from the Conservative Party conference

Jordan Stockman, from Northern Ireland, says: "I thought it was absolutely fantastic."

He adds that there was "not a lot in terms of new policy announcements" but the overall message was "rousing" and set the party on a strong path to the next election.

Dr Ian Heath, of Folkestone and Hythe, says he was "absolutely astounded" by the number of policies in the speech and "the commitment she has made on inheritance tax".

Badenoch has "shown Reform to be the fourth party".

Brian Wheeler
Reporting from the Conservative Party conference

I've been speaking to people at the conference after Badenoch's speech.

Samantha George tells me: "I thought it was an absolutely fabulous speech. We are now general election ready."

Image source, EPA

Responding to Kemi Badenoch's conference speech, Labour chair Bridget Phillipson says: "The Tories haven’t changed."

She accuses the Conservatives of "prioritising the wealthiest" instead of helping "ordinary families struggling with the cost of social care".

"Only Labour will build a national care service, with free personal care for all older people who need it," she says.

She says the Conservatives won't take the country the "right way" - a reference to an essay published by Badenoch - but will instead put it "into reverse with the same Tory failures that crashed our economy and left public services crumbling".

Kemi Badenoch has gone "as far as she can" to help hard working middle class people pass their family home on to their children, the shadow home secretary has said.

Chris Philp tells Radio 4's World at One programme the Conservatives' new measure for inheritance tax will help over half the people who currently pay the tax, saying the plan is about "fairness".

He adds that while the party leader would have liked to abolish the tax completely, she has proposed the new cut "responsibly" to prioritise other spending in areas such as pensions and defending the country.

Does the government spend more on benefits than it raises in income tax?published at 13:43 BST

13:43 BST

By Tom Edgington

Kemi Badenoch told the Conservative Party conference that “we spend more on benefits then we raise in income tax”.

Welfare spending was expected to total £332.9bn in the 12 months to March 2026. That’s according to the latest assessment from the Office for Budget Responsibility (OBR), the independent body that scrutinises the public finances.

Over the same period, the government was also expected to raise £331.4bn from income tax, meaning welfare spending was £1.5bn higher.

However, for the current financial year (2026-27), the OBR expects income tax to raise £359.6bn, compared with £352.8bn spent on welfare.

This means income tax receipts are forecast to be £6.8bn higher than welfare.

It’s worth noting that welfare spending includes a significant amount of state pension expenditure.

According to separate figures from the Department for Work and Pensions, £146.1bn was expected to be spent on the state pension in 2025-26.

Brian Wheeler
Reporting from the Conservative Party conference

Long-standing Conservative Party member Alexandra Hooper, from Buckinghamshire, says: “This is the first time I have felt compelled to come to conference because I genuinely believe that the Conservatives are the only party that have a proper plan.”

She believes the party lost its way during the Boris Johnson era and voted for Badenoch in the 2024 leadership election.

“She has more than lived up to my expectations. She is a class act.”

Her friend, Sue Stimson, tells me: “This is my first ever Conservative Party conference.

"I’m only recently a party member. The reason I joined is actually because of Kemi. She really seems like your old school conviction politician, who really genuinely believes in what she says.”

In her speech, Kemi Badenoch announced that a Conservative government would legislate to make changes to the inheritance tax system.

Inheritance tax applies to a person's estate worth more than £325,000, or £500,000 if a home is left to children or grandchildren. Married or civil partners can also transfer assets between each other.

Katie Williams
Live reporter

Image source, EPA

In an hour-long conference speech, Conservative leader Kemi Badenoch said a battle of ideas was coming in British politics, going "to the very core of who we are".

Here's a recap of what she said:

Taxes

• Badenoch pledged to cut "every inheritance tax bill", saying nobody would pay inheritance tax on their family home under a Conservative government
• She also said couples would be allowed to pass on an additional £1m tax free

Economy

• Badenoch said the Tories would focus on reducing government borrowing, using half of any policy savings to cut the deficit
• She said businesses are being "held back" from achieving growth by the planning, tax and energy systems
• On youth unemployment, she said the answer is to "move government out of the way" so businesses can create jobs
• She also called for a "tough love" approach to welfare, pledging spending restrictions for those who haven't found work within six months

Party politics

• Taking aim at Labour, she accused the government of ideas that will "make every single person in this country poorer"
• She pitched a new Conservative Party with a "united team", saying the "drama" of the old party was gone
• Reform UK voters "deserve better", she argued, adding the Conservatives want the voters they have lost back

Joe Pike
Political correspondent at Conservative Party conference

That ticked off the broad themes of Tory leaders' speeches over the years: tax cuts, law and order, defending the nation.

The members enjoyed it, and Badenoch seems increasingly confident.

She is able to change gear from humour, to emotive messages and political rhetoric with ease.

But the audience that matters is far outside this sweaty conference centre.

And although her personal ratings have risen, voters' views of her party remain decidedly mixed. And if an election was called today, the Tories would be in danger of being pushed into third place behind Labour and Reform.

Brian Wheeler
Reporting from Conservative Party conference

The Tory faithful rise to their feet as Badenoch finishes her speech with a promise to get Britain working again.

She is joined on stage by husband Hamish and a few Union flags are waved as the pair make their way though the adoring crowd.

At the start of the week she described herself as an old-school Conservative - and this was an old-school leader's speech.

Although it’s hard to imagine Margaret Thatcher using the word “badass” as Badenoch did to describe a tough school head.

Image source, Getty Images

Closing out her speech, Badenoch says the Conservatives are "are on your side, whoever you are".

We have something for everyone, she adds, listing parents, business owners, and police officers.

She then greets her husband and the pair walk off stage together, before heading out of the hall to applause.

Image source, PA Media