What happens when you tax an inheritance? Applying British standards, 50 percent of the inheritance gets lost to the government coffers. If this money is sitting in a savings account or in a safe, the fact might be annoying to the heir, but hardly life threatening to anyone. If the money on the other hand is sitting in a company providing work to people, losing half the money could mean the end of the company. This second case in fact doesn’t redistribute wealth, it kills it