The personal representatives of the estate pay it, before the recipient gets a penny. It is not a tax on the recipient, it is a tax on my estate (or whoever's died, that is).
Why?
Well, for a start, because it's paid before the recipient gets it. Secondly, because the extent of the tax depends on my decisions, not those of the recipient who (with one exception) has no say in the matter. Thirdly, because it's dependent on my personal circumstances, the extent of my estate and my decisions. The circumstances of the recipient have NO impact on the tax. A case in point, the recipient could be a pauper or a multi-millionaire, and that fact has no bearing on the extent of the IHT levied.
There are many other ways this could be done where it would be the recipient that pays. For instance, income received is treated exactly as that .... income .... and subject to income tax and CGT rules. Then, a 40% taxpayer would pay 40%, but a lower rate taxpayer would pay less (or nothing, depending on the size of the bequest and the circumstances of the recipient).
Next, I can specify whether a bequest is to be treated as before or after tax. Suppose I give one son £50,000 'tax paid', and the other son £50,000 'from the residual'. Assuming the estate is large enough to pay out that first £50,000, after IHT has been taken, he'll get £50,000 in full, with IHT making no difference to the sum. But the other son will get his £50,000 only if that sum is left after all specific bequests have been paid, and they are paid after IHT is deducted. So, if there's £70,000 left after IHT, one son gets £50,000 and the other £20,000. Again, as you can see, it's my will and my wishes that determine who gets what, and IHT that biases it in that way.
The government could, if it wished, treat an inheritance as income, and as capital gain. Then, if you inherited your "principal residence" (i.e. your home) you wouldn't pay CGT on it on disposal, because of the CGT exemption. But, if you already have a home, the bequest (as a second home) wouldn't have that PPR exemption and, on disposal, you'd be liable for the tax on the capital gain.
But again, IHT is iniquitous because as it works at the moment, the recipient is going to lose a large part of their inheritance (in many circumstances) because of the operation of the property market on an asset prior to them owning it, regardless of their income or circumstances. Suppose it's a house in the Home Counties bought for £4200 in 1965. It'll now be worth (in the order of) £420,000. In 1965, this inheritance would have led to no IHT bill. Now, on it's own, the recipient gets to lose £46,000 of that gain in IHT.
If it's a tax on the recipient, why should the amount they pay in no way relate to their personal circumstances, as it would if it were income?
Whatever people say, it's not a tax on the recipient. It's a tax on the estate.
By that reckoning water and toilet paper should be free.