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Inheritance tax superseded earlier UK arrangements for taxing wealth, including estate duty or death duty and capital transfer tax.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 ?
Any theoretical analysis of estate taxation requires taking a stand on the nature of intergenerational links.
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Barranca is an Adjunct Professor of Accounting, Finance and Taxation with the New York University Graduate Program in Real Estate, He has authored materials for continuing professional education providers; his work has appeared in the AICPA's Tax Adviser, the Journal of Real Estate Taxation and Mortgage and Real Estate Executives Report.
Parliament threw out government legislation calling for a one point increase in corporate tax and changes in its real estate taxation system.
Such policies, if left to non-charitable beneficiaries at the insured's death, will in most cases be income tax-free, but they will be subject to estate taxation in the donor's estate, thereby reducing what the heirs of the estate would receive.
His research interests include behavioral responses to income and estate taxation, tax avoidance and administration, optimal taxation and tax systems, evolution of wealth and income inequality, and the nature of intergenerational linkages.
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The upper level of a church's parish house did not qualify for exemption from real estate taxation as an institution of "purely public charity," according to the Commonwealth Court of Pennsylvania.
A contentious issue in estate taxation is the valuation of stock in a closely held corporation.