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Inheritance tax superseded earlier UK arrangements for taxing wealth, including estate duty or death duty and capital transfer tax.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 ?
I also show that estate taxation may provide implicit annuitization (the necessary and sufficient condition being that the present value of estate tax payments falls with age), and argue that it does so in practice.
In essence, they allow clients to hold the benefits of absolute ownership of assets without the negative ramifications of estate taxation and access by creditors.
A secondary rationale" for estate taxation, Bartlett asserts, "is that inherited wealth is undeserved and perhaps even harmful for the recipient.
From 1987 to 1997, a greater percentage of the population faced estate taxation as inflation eroded the value of the $600,000 exemption.
Vast inheritances do more to erode the work ethic among children of the wealthy than estate taxation does to quash the entrepreneurial incentives of their parents.
A Gallup poll taken in 1995 showed that family business owners believed a repeal of estate taxation would enable them to grow their businesses 5 percent faster through increased investments.
The nature of your assets and where they are located also affects estate taxation and planning.
The proceeds can be structured to avoid estate taxation but still be available to pay estate taxes that would otherwise be incurred based on the value of qualified plan benefits, other non-qualified benefits, and the value of stock options and restricted shares.
He specializes in real estate taxation and syndication and is the author of numerous articles on real estate as well as the Low-Income Housing Tax Credit Handbook.
TAXRITE prides themselves as advocates of property tax simplicity, leading the way for taxpayers and municipalities to create an easier, more accurate and efficient system of real estate taxation.
The new tax law contains another boost for life settlements in the form of an increase in the amount excludable from estate taxation.
The committee asked to meet the Egyptian Real Estate Taxation Authority (RTA) in the first half of December to discuss improving the performance.