What is the standard rate of inheritance tax?

Inheritances are typically subject to taxation, and the standard rate of inheritance tax is set at 40%. This rate is applicable to the value of assets that exceed a certain threshold, which can vary depending on the jurisdiction and specific tax laws in place.

The rationale behind this 40% rate reflects a combination of policy decisions aimed at equity and revenue generation. It places a significant tax burden on substantial estates, which is intended to mitigate wealth concentration and promote social equity. This standard rate also aligns with broader taxation principles in many countries where higher wealth is taxed at elevated rates to fund public services and welfare programs.

It's important to note that exemptions and reliefs may apply, potentially lowering the effective rate for some estates. However, the fundamental tax structure sets the standard rate at 40%, distinguishing it from other percentage rates mentioned in the choices, which do not typically reflect the prevailing inheritance tax norms.