What type of tax does Inheritance Tax specifically target?

Inheritance Tax specifically targets the wealth of deceased individuals. This tax is levied on the value of an estate or assets left behind when someone passes away. It is calculated based on the total value of a person's estate, which includes property, money, and possessions. The purpose of this tax is to ensure that a portion of this wealth is paid to the government instead of being passed entirely to heirs or beneficiaries without any taxation.

When individuals inherit wealth, particularly large estates, it is essential to recognize that the Inheritance Tax applies before the assets are transferred to the inheritors. This tax can vary based on the total value of the estate and any applicable exemptions or reliefs. Importantly, Inheritance Tax serves a different purpose than the other types of taxes mentioned, as it focuses exclusively on the transfer of wealth after death rather than income generated within a year, profits from selling assets, or corporate earnings.