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 called for phasing out the federal estate tax by 2012, but that was reversed and the tax remained in place on estates worth more than $5.49 million (twice that for couples). Changes in 2017 doubled those thresholds for 2018–25.

inheritance tax

1. (in Britain) a tax introduced in 1986 to replace capital transfer tax, consisting of a percentage levied on that part of an inheritance exceeding a specified allowance, and scaled charges on gifts made within seven years of death
2. (in the US) a state tax imposed on an inheritance according to its size and the relationship of the beneficiary to the deceased
References in periodicals archive ?
Gifts that are not exempt from IHT will be charged 40 per cent tax if given in the three years before you die.
IHT Wealth Management is an independent wealth management firm and Office of Supervisory Jurisdiction specialising in financial planning, legacy and retirement planning, investment management and insurance and risk management.
So, for example, if you give away your house - but continue to live in it, rent-free - it will remain part of your estate and so liable to IHT when you die.
The flexibility of these trusts enables IHT, CGT and income tax to be minimised and also protects the assets for the future benefit of all the beneficiaries.
Most importantly, regular gifts of any amount from surplus income are also exempt from IHT.
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.
Ian Battersby, of Seneca Partners, said: "Our new Inheritance Tax service is a unique proposition that allows people to protect their estate from IHT, while at the same time providing much-needed finance to British businesses.
Without a proper Will, people run the risk of their estate being severely reduced through IHT and also leaving themselves exposed to the ravages of long term care costs later in life.
This trust is then deemed to have been set up by the deceased rather than the beneficiary of the estate for IHT purposes.
The IHT Sports Business Summit brings together some of the most senior figures in the sports industry in conversation with the IHT's renowned sports journalists for high-level learning, debate and discussion, as well as exclusive networking opportunities with Government ministers, sports federation leaders, investors in infrastructure and global sponsors.
IHT was also concerned with understanding Internet usage and defining acceptable usage policies.
This will require "hard decisions about jobs at the IHT," and the company is now looking to "reassign or relocate people," according to the memo.