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Inheritance tax superseded earlier UK arrangements for taxing wealth, including estate duty or death duty and capital transfer tax.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 ?
He says there is also the option of investing in assets which qualify for Business Property Relief, such as shareholdings listed on the Alternative Investment Market, which will be exempt from IHT if they are held two years immediately before death.
There are a number ways of reducing your exposure to IHT including ideas such as investments which qualify for IHT relief, the making of gifts during your lifetime and the use of trusts.
Insurance can also play a part in meeting eventual IHT liabilities, where other measures are not possible or appropriate.
Established in Paris in 1887, today the IHT is owned by The New York Times Company and continues to expand the reach of its authoritative journalism through the newspaper which is sold in 180 countries and via computers and mobile devices at IHT.
The impressive speaker lineup at the IHT Sports Business Summit will provide important analysis on commercial opportunities in sport, and look at vital topics from the impact of new media technologies to how globalization and the rise of the BRIC nations is reshaping the sports business landscape.
At Newcastle Financial Services Limited, we can help to explain the rules around IHT and work with you - face to face - to create a plan designed to keep your IHT liability to a minimum.
Individuals transferring property into trust during lifetime in excess of PS325,000 will generally suffer an IHT charge of 20% on that excess.
However, they must remain invested for two years to qualify for IHT relief.
The appellate judge elected IHT President is also President of the Appellate Chamber.
The IHT and RCLO did develop a durable solution to the problem of security for private defense attorneys.
Property alone has pushed more than five million people into IHT territory, with their houses valued above the pounds 285,000 threshold at which the 40 per cent tax kicks in.