Inheritance tax is a tax imposed on the estate (property, money, and possessions) of someone who has died. It is generally charged only if the total value of the estate exceeds a certain threshold. In the UK, for example, there is no inheritance tax to pay if the estate's value is below £325,000 or if everything above this threshold is left to a spouse, civil partner, charity, or certain other exempt recipients. The tax is charged at a standard rate of 40% on the amount of the estate exceeding the threshold. Some reliefs and exemptions may apply, such as a reduced rate of 36% if 10% or more of the net estate is left to charity. There are also other allowances like the Residence Nil Rate Band which can increase the threshold if the estate includes a home passed to children or grandchildren, potentially raising the threshold to £500,000. In the UK, any unused threshold by a deceased spouse can be transferred to the surviving spouse or civil partner, potentially doubling the allowance to up to £1 million for the surviving partner's estate. Inheritance tax rules vary in different countriesand can depend on factors such as the deceased's residency, the location of assets, and the relationship of the beneficiaries to the deceased. For example, in the US, only some states have inheritance tax and it is typically paid by the beneficiaries rather than the estate itself. In summary, inheritance tax is a levy on the estate or beneficiaries of someone who dies, calculated based on the estate's value over a government-set threshold, with rates and exemptions varying by jurisdiction.