inheritance tax

Also found in: Dictionary, Thesaurus, Legal, Financial, Acronyms, Wikipedia.
Related to inheritance tax: capital gains tax, gift tax, estate tax

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 ?
She said the nil rate band for inheritance tax is currently PS325,000, while home owners have a residence nil rate band at PS100,000.
Such gifts do not get charged to inheritance tax, regardless of when they are made but, with the right advice, both the charity and the family can achieve much greater benefit from such a gesture.
An article in the Telegraph recently highlighted figures released in April by the Office for National Statistics, showing the Government is on track this year to receive the highest annual intake of inheritance tax receipts in history, a projected PS4.
Ian Dyall, estate planning expert, Towry said: "There are many steps that can be taken to mitigate your inheritance tax bill.
Bequests to Class A beneficiaries are not subject to the inheritance tax (NJAC section 18:26-2.
He said: "The quickest way of making a significant dent in your inheritance tax liabilities is to invest in assets that qualify for Business Property Relief (BPR), as this will give you relief from inheritance tax after just two years.
This may be of benefit to say grandparents wishing to help their grandchildren who are faced with increasing educational costs whilst at the same time helping to mitigate their own Inheritance Tax liability.
This means around four million more people, including owners of an average home across many areas of Britain, could become liable for inheritance tax.
BURDEN The threshold for inheritance tax is pounds 325,000.
PAUL Brokenshar of Investec Wealth & Investment, recalls that in his last article he wrote about inheritance tax, which is a tax on everything you own in the event of your death.
AA transfer of title will ensure your children get the appropriate inheritance but it may lead to a large inheritance tax bill.
Nakauchi, also known as the former owner of professional baseball club Fukuoka Daiei Hawks, now the Softbank Hawks, failed to declare 550 million yen of income that he received from his father in August 2005 and evaded some 270 million yen in inheritance taxes in violation of the inheritance tax law, according to the ruling.