The Conservatives are evaluating a move to counter a Labour pledge of scrapping non-dom status by ending the ability to inherit the status.
The Times reports that Chancellor George Osborne is considering blocking non-domiciled individuals passing down the ability to avoid paying tax on overseas earnings.
The report comes just a day after Labour announced its own plans to end non-dom status, allowing only those who have been in the UK for “a short period” to pay tax on just UK-based income and gains.
Labour has said it will consult on the exact amount of time the new rules will apply to temporary residents.
A Conservative move to limit the inheritance of non-dom status would come despite a barrage of criticism for the Labour plans, and would mirror a similar pledge from the Liberal Democrats.
Chief secretary to the Treasury Danny Alexander said yesterday the Lib Dems are planning the same reform, as well as increases to current remittance charges.
A Conservative spokesman had not responded to request for comment at the time of publication.