How does the inheritance tax work?

Can you explain how the inheritance tax works?

Sure! Inheritance tax is a tax on the estate of a deceased person. It is usually paid by the beneficiaries of the estate.

What is the threshold for inheritance tax?

The threshold varies by country. In the UK, for example, it's £325,000. Anything above that may be taxed.

Are there any exemptions or reliefs available?

Yes, there are exemptions such as the spousal exemption, which allows transfers between spouses to be tax-free.

How is the tax rate determined?

The tax rate can vary, but in the UK, it is typically 40% on the value of the estate above the threshold.

What happens if the inheritance tax isn't paid?

If the inheritance tax isn't paid, the tax authorities can place a charge on the estate, which may delay the distribution of assets.