Rishi Sunak is reportedly considering cutting inheritance tax as he tries to woo voters and create a dividing line with the Labor Party, which is comfortably ahead in the polls.
IHT is currently levied at 40% on properties valued at more than £325,000 for a single person or £650,000 for a couple.
If inheritance tax is scrapped, the UK will join Australia and Canada, which have done so previously.
Proposals under consideration include an announcement of an intention to phase out the tax by cutting the 40 per cent rate of inheritance tax in the March 2024 Budget, as well as a plan to abolish it entirely later.
The Office for Budget Responsibility (OBR) estimates that IHT generates around £5.4 billion a year. Although it represents less than 1% of total tax revenue, the repeal could still leave a negative mark on UK public finances.