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inheritance tax

 
Dictionary: inheritance tax
 

n.

A tax imposed on the privilege of receiving property by inheritance or legal succession and assessed on the value of the property received. Also called death tax.


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Investment Dictionary: Inheritance Tax
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In some states in the U.S. (and in the United Kingdom), a tax imposed on those who inherit assets from a deceased person. The tax rate for inheritance taxes depends on the value of the property received by the heir or beneficiary and his/her relationship to the decedent.

Inheritance tax is known in some countries as a "death duty" and is occasionally called "the last twist of the taxman's knife".

Investopedia Says:
Inheritance tax is not the same as estate tax, which is imposed on the total value of a person's estate when that person dies. Rather, inheritance tax is imposed on the property that is passed to an heir.

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Life changes make it time to rewrite your plan's designations. Update Your Beneficiaries
Don't let bad estate planning lead to unnecessary costs and stress for your inheritors. Skipping-Out on Probate Costs


 
Business Dictionary: Inheritance Tax
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State tax based on the value of property passing to each particular heir. It differs from the federal estate tax in that the degree of kinship of the heir to the decedent generally determines the exempt amounts and tax rates. An Estate Tax is based on the value of all property left by the decedent, whereas an inheritance tax is based on the amount that an heir receives. See also Unified Estate and Gift Tax.

 
Real Estate Dictionary: Inheritance Tax
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A tax, based on property Value imposed in some states on those who acquire property from a decedent. Compare Estate Tax.
Example: An estate tax is based on the value of all property left by the decedent, whereas an inheritance tax is based on the amount that an Heir receives.

 
Britannica Concise Encyclopedia: inheritance tax
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Levy on the property accruing to each beneficiary of the estate of a deceased person. Inheritance tax may be more difficult to administer than estate tax because the value passing to each beneficiary must be fixed, and this often requires complex actuarial calculations. Inheritance taxes date back to the Roman Empire. In the U.S. inheritance taxes have always been collected by the individual states, while the federal government has imposed an estate tax. The first state inheritance tax was imposed by Pennsylvania in 1826.

For more information on inheritance tax, visit Britannica.com.

 
Columbia Encyclopedia: inheritance tax
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inheritance tax, assessment made on the portion of an estate received by an individual; it differs from an estate tax, which is a tax levied on an entire estate before it is distributed to individuals. The inheritance tax is usually progressive and is determined by the amount of property received by the beneficiary, as well as by his or her relationship to the deceased. Strictly speaking, it is a tax on the right to receive the property; the estate tax can be characterized as a tax on the right to transmit the property. All states impose either an estate tax or an inheritance tax, some states employing both. A related federal levy is the gift tax, designed to prevent people from avoiding inheritance and estate taxes by giving away property before death.

In the United States, the federal government levied inheritance taxes during the Civil War period and again during the Spanish-American War; since 1916, however, a progressive estate tax has been imposed. The U.S. tax law of 1981 greatly reduced estate and gift taxes by raising exemptions (from $175,000 to $600,000) and lowering rates, and a 2001 law calls phase out the federal estate tax by 2012; estate taxes in 40 states that are based on the federal tax credit for state estate taxes would be phased out in 2006.


 
Wikipedia: Inheritance tax
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Estate tax and Death duty redirect here.

Inheritance tax, estate tax and death duty are the names given to various taxes which arise on the death of an individual. It is a tax on the estate, or total value of the money and property, of a person who has died.[1] In international tax law, there is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However this distinction is not always respected. For example, the "inheritance tax" in the UK is a tax on personal representatives, and is therefore, strictly speaking, an estate tax.

  • In some jurisdictions the term used is estate tax:
  • In some jurisdictions the term used is death duty, and for historical reasons that term is used colloquially - although it is no longer correct legally - in the United Kingdom and some Commonwealth nations.
  • In some jurisdictions the term is estate duty:
  • In some jurisdictions, death gives rise to a charge to stamp duty:
  • In some jurisdictions, death gives rise to a charge to capital gains tax:
Where a jurisdiction has capital gains tax and inheritance tax (for example the United Kingdom) it is usual to exempt death from the capital gains tax.
  • In some jurisdictions death gives rise to the local equivalent of gift tax (see Austria, below, for example). This was the model in the United Kingdom during the period before the introduction of Inheritance Tax in 1986, where estates were charged to a form of gift tax called Capital Transfer Tax. Where a jurisdiction has a gift tax and an estate tax (for example the United States at federal level) it is usual to exempt death from the gift tax. Also, it is common for inheritance taxes to share some features of gift taxes, by taxing some transfers which happen during lifetime rather than on death. The United Kingdom, for example, taxes "lifetime chargeable transfers" (usually gifts to trusts) to inheritance tax.
  • Non-English speaking jurisdictions naturally use non-English terminology:
    • Belgium, a multilingual nation, uses the terms droits de succession ("rights of succession") and successierechten, taxes on beneficiaries which are collected at the federal level but distributed to the regional level.
    • Czech Republic charges daň dědická, taxes on beneficiaries.
    • Finland has perintövero (Finnish) or arvskatt (Swedish)
    • France uses the term droits de succession ("rights of succession"), taxes on beneficiaries.
    • Germany charges Erbschaftssteuer, a tax on beneficiaries.
    • Italy initially abolished its tassa di successione in 2001, [1] then re-introduced it for large estates in 2006. The exempt amount in the case of spouse and children is Euro 1,000,000 each. Maximum rate is 8%. [2][3]
    • The Netherlands charges successierecht, a tax on beneficiaries.
    • Switzerland has no Erbschaftssteuer / impôt successoral / imposta di successione at national level. However in the various cantons, three possibilities (a tax on the estate, a tax on the beneficiaries, or no tax) exist.
  • Some jurisdictions have never had estate or inheritance taxes, or have abolished them:
    • Austria abolished the Erbschaftssteuer in 2008. This tax had some of the features of the gift tax, which was abolished at the same time [3].
    • Australia abolished the estate tax federally in 1979.[4]
    • New Zealand abolished estate duty in 1992.
    • Sweden abolished its inheritance tax in 2005. [4]
    • India enforced estate duty from 1953 to 1985. Estate Duty Act, 1953 came into existence w.e.f. 15 Oct 1953 till E.D.(Amendment) Act 1985 discontinued levy of estate duty on deaths occurring on or after 16 Mar 1985.
    • British Virgin Islands
    • Singapore abolished estate tax in 2008, for deaths occurring on or after 15 Feb 2008[5][6]
    • Some states of the United States: see Inheritance tax at the state level:
      • LA - Louisiana - In place through 2003
      • NH - New Hampshire - In place through 2003

References

  1. ^ Sullivan, arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 358. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4. 
  2. ^ a b "A Guide to Kentucky Inheritance and Estate Taxes: General Information". Kentucky Revenue Cabinet. March 2003. http://revenue.ky.gov/NR/rdonlyres/6D844DC9-B300-4EE7-963E-DB141FC0AED6/0/guide_2003.pdf. Retrieved on 2009-05-29. 
  3. ^ http://vorarlberg.orf.at/stories/176790/
  4. ^ http://www.taxfoundation.org/blog/show/1678.html

 
 

 

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Dictionary. The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2007. Published by Houghton Mifflin Company. All rights reserved.  Read more
Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Business Dictionary. Dictionary of Business Terms. Copyright © 2000 by Barron's Educational Series, Inc. All rights reserved.  Read more
Real Estate Dictionary. Dictionary of Real Estate Terms. Copyright © 2004 by Barron's Educational Series, Inc. All rights reserved.  Read more
Britannica Concise Encyclopedia. Britannica Concise Encyclopedia. © 2006 Encyclopædia Britannica, Inc. All rights reserved.  Read more
Columbia Encyclopedia. The Columbia Electronic Encyclopedia, Sixth Edition Copyright © 2003, Columbia University Press. Licensed from Columbia University Press. All rights reserved. www.cc.columbia.edu/cu/cup/  Read more
Wikipedia. This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Inheritance tax" Read more

 

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