Inheritance tax is a tax that is levied on the estate of a deceased person in the UK. The tax is based on the value of the estate, which includes any property, money, and possessions that the person owned at the time of their death.

The inheritance tax rate is currently set at 40% and applies to the portion of the estate that is above the inheritance tax threshold, which is currently set at £325,000 for individuals. For married couples and civil partners, any unused inheritance tax threshold can be transferred to the surviving spouse or partner, effectively doubling the threshold to £650,000.

Certain assets, such as those left to a spouse or civil partner, charity, or political party, are exempt from inheritance tax. There are also a number of other exemptions and reliefs available, such as the nil-rate band, which allows for a certain amount of the estate to be passed on tax-free to direct descendants.

It is important to plan for inheritance tax to ensure that the tax liability is minimized and that the estate is distributed in accordance with the deceased person's wishes. This can be done through various methods, such as making gifts during one's lifetime, setting up trusts, and making use of various exemptions and reliefs available under the tax rules.

Overall, inheritance tax is a complex area of taxation and it is recommended that individuals seek professional advice to ensure that their estate planning is carried out effectively.