What type of tax is 'inheritance tax' (IHT)?

Inheritance tax (IHT) is classified as a tax on the estate of a deceased person. This means it is levied on the value of all the assets owned by an individual at the time of their death, minus any debts and liabilities. The tax is typically calculated based on the total value of the estate, which can include property, investments, and various personal belongings. Inheritance tax is assessed after a person's death and is paid from the estate before the assets are distributed to the beneficiaries.

This classification is distinct from other types of taxes, such as income tax, which is based on earnings from work; capital gains tax, which applies to profit from the sale of assets; or corporation tax, which is related to the profits of a business. The focus of inheritance tax is specifically on the transfer of wealth upon death, making it a unique category within the tax system.