inheritance tax

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Inheritance Tax

A tax on the money or assets that one inherits from an estate, as opposed to a tax on the estate itself. In the United States, inheritance taxes are levied at the state level and apply to the inheritors rather than the estate of the deceased. Generally speaking, inheritance taxes vary according to the inheritor's relationship with the deceased. For example, a spouse rarely, if ever, is responsible for an inheritance tax. It should not be confused with an estate tax, which is a tax on the estate before it is distributed.

inheritance tax

A state tax levied on the recipient of an estate rather than on the estate itself. The tax varies by state and its severity in a given state usually depends on the kinship between the deceased and the heir. Some states levy a tax on the estate instead of a tax on the amount inherited. Also called death tax. Compare estate tax.
How can I minimize inheritance tax?

Estate and gift tax law is in a state of flux. An estate planning attorney will have the most up-to-date information available to assist you in minimizing your tax liability. Avoiding probate should also be a goal. Joint ownership, revocable living trust, irrevocable trusts, and life insurance may be useful tools to avoid or eliminate the estate tax and costs of probate, but only an experienced estate planning attorney can help you decide which of these tools will suit your needs best.

Gloria Cole, Attorney, private practice, Weston, MA

inheritance tax

a form of WEALTH TAX imposed by the UK government on a proportion of a person's private assets when these assets are transferred to the person's beneficiaries. Currently (as at 2005/06) ‘chargeable assets’ such as houses, stocks and shares, etc. up to a maximum of £275,000 are tax-exempt. Above £275,000 inheritance tax is levied at a flat rate of 40%. Assets transferred more than seven years before the donor's death are exempt from inheritance tax, while assets transferred between three and seven years before death are taxed at lower rates.

Inheritance tax superseded earlier UK arrangements for taxing wealth, including estate duty or death duty and capital transfer tax.

inheritance tax

see WEALTH TAX.

inheritance tax

See estate tax.

References in periodicals archive ?
The Estate Duty Assessment Amendment Bill 1978 precipitated the first substantial debate on death duties since 1914.
The choice of beneficiary may also affect the amount of estate duty payable, the amount of executors' fees payable, etc.
It was no joke inheriting a house and estate in 1948 with inheritance tax and estate duty sucking out pounds 3 of every pounds 4 from the business.
HONG KONG - Hong Kong's Legislative Council Wednesday passed the Revenue (Abolition of Estate Duty) Bill 2005 which seeks to amend the Estate Duty Ordinance to implement the proposal announced in the 2005-06 Budget to abolish estate duty.
Last year, the National Galleries of Scotland scored a notable triumph with the acquisition, partly in lieu of estate duty, of the Duke of Sutherland's Venus Anadyomene by Titian.
In 1984, we cut estate duty from a maximum of 60 per cent to between 5 per cent and 10 per cent, depending on the value of the estate.
ASORTING out a deceased person's property can be complicated by claims the state makes for care contributions and outstanding income tax or estate duty.
Such registration exempts the company and/or beneficial owner from all income tax and estate duty in Gibraltar.
Information on the methodology used for allocating various other central and provincial taxes (wealth taxes, estate duty, stamp and registration, etc.