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Inheritance tax superseded earlier UK arrangements for taxing wealth, including estate duty or death duty and capital transfer tax.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 ?
Table 1: Estate Duty Assessment Bill, 1914: Reasons Offered by Speakers for and against the Introduction of a Commonwealth Estate Tax in the House of Representatives, Australia For tax (%) Against tax (%) Inherent in the Law 12.
47, above, note 2 (response to question 9), make it clear that granting an income tax reduction as well as extinguishing the Estate Duty liability was considered and rejected by HM Treasury.
The estimation technique has been improved to account for the type of available information which was not available to Lyons, for example, estates not captured by the estate duty data.
As the name suggests, its early years were spent on estate duty being the type of transport used for carrying staff and guests to and from the action during the grouse shooting season.
If it was prior to the capital transfer/inheritance tax regime introduced in 1975, the old estate duty rules will need to be considered.
The son of a County Durham coal miner, Vincent began his career in London in 1969 when he joined the Estate Duty Office as a trainee lawyer.
A keen Newcastle United fan, he began his career in London in 1969 when he joined the Estate Duty Office as a trainee lawyer.
Capital may be brought in tax-free and, in the event of death, there is no estate duty payable.