In IFR flight, fuel planning is critical. Unlike VFR, you cannot simply land at any airfield; you are bound to your clearance and must plan fuel to reach your destination or a diversion with legal reserves. When your fuel situation degrades unexpectedly, you must inform ATC immediately.
Minimum fuel is declared when your remaining fuel is just sufficient to reach your destination, plus the required legal reserve, with no margin for delays or holding. This is not an emergency (MAYDAY) unless fuel is critically low. It is a PAN-PAN level urgency that alerts ATC to prioritize you for landing without unnecessary delays.
Legal fuel reserves for IFR flight vary by regulation but typically are:
Destination: 45 minutes of fuel in standard conditions
Alternate: An additional 15 minutes of fuel
Additional: 15 minutes of fuel for holding, vectors, or other contingencies
If you calculate that you will have exactly these reserves on arrival at destination, you have no margin and must declare minimum fuel.