Inheritance tax

law distinguishes between an estate tax and an inheritance tax. An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate of a person who has died. However, this distinction is not always observed; for example, the UK's "inheritance tax" is a tax on the assets of the deceased, and strictly speaking is therefore an estate tax. Inheritance taxes vary widely between countries.

History

There was a steep increase in the number of countries that implemented inheritance taxes throughout the 19th and early 20th century. From 1960 onwards, inheritance taxes declined in prevalence as numerous countries repealed theirs. For historical reasons, the term "death duty" is still used colloquially in the UK and some Commonwealth countries. The estate tax in the United States is sometimes referred as "death tax".

Other taxation applied to inheritance

In some jurisdictions, when assets are transferred by inheritance, any unrealized increase in asset value is subject to capital gains tax, payable immediately. This is the case in Canada, which has no inheritance tax.
When a jurisdiction has both capital gains tax and inheritance tax, inheritances are generally exempt from capital gains tax.
In some jurisdictions, like Austria, death gives rise to the local equivalent of gift tax. This was the UK model before the Inheritance Tax in 1986 was introduced, when estates were charged to a form of gift tax called Capital Transfer Tax. Where a jurisdiction has both gift tax and inheritance tax, it is usual to exempt inheritances from gift tax. Also, it is common for inheritance taxes to share some features of gift taxes, by taxing some transfers which happen during the lifetime of the giver rather than on death. The UK, for example, subjects "lifetime chargeable transfers" to inheritance tax.

Arguments

Arguments for inheritance taxes include reduction of discrimination between inherited income and income from work due to taxing at different tax rates. Inheritance has been compared to nepotism and inconsistent with the values of capitalism. Inheritance tax has been argued to be preferable to income tax on work or land value tax.
Arguments against inheritance taxes include loss aversion to kinship. Differences in inheritance taxes on trusts and estates of natural persons have been described by one article as inequitable. Georg Hegel viewed families as legal persons, which is reflected in German inheritance laws for family firms.

By country

: droits de succession or erfbelasting. Collected at the federal level but distributed to the regional level. In the 2018 huge set of reforms, considering inheritance taxes, was accepted on the federal level and thus many changes on the regional level were also made. Since 2018, family homes are exempt from tax in all regions if it is bequeathed to a direct-line family member, spouse, or cohabitant.
: stamp duty.
: Imposto sobre Transmissão "Causa Mortis" e Doação de Quaisquer Bens ou Direitos. Collected at the state level. Brazilian States can charge progressive rates for the ITCMD, increasing the rate according to the amount donated or inherited, however, the Brazilian Senate limited the maximum rate to 8%.
: No inheritance tax, however the inheritance is considered as extraordinary income, therefore it is subject to capital gains tax.
: Boafgift. Collected at state level. Different rates depending on the relation to the deceased. Spouse: 0%. Children: 15%. Other relatives: 15% of the estate sum plus an additional 25% of the individual sum. The estate duty is calculated on the sum of the estate after deducting a free allowance on the estate.
: perintövero or arvsskatt is a state tax. Inheritance to the close family is tax free up to the worth of €20,000, and increasing from there via several steps to the maximum of 19% that must be paid for the portion of the inheritance that exceeds one million euros. Taxation is more severe in the case of remote relatives or those with no family connection at all.
: droits de succession. Inheritance to the close family is tax-free up to the worth of €100,000, and increasing from there via several steps to the maximum of 45% that must be paid for the portion of the inheritance that exceeds 1.8 million euros. Taxation is more severe in case of remote relatives or those with no family connection at all.
: Erbschaftsteuer. Smaller bequests are exempt, i.e., €20,000–€500,000 depending on the family relation between the deceased and the beneficiary. Bequests larger than these values are taxed from 7% to 50%, depending on the family relationship between the deceased and the beneficiary and the size of the taxable amount.
: Inheritance tax on intangible assets.
: The inheritance tax in Greece is different for different groups based on the degree of relationship with the deceased. Heirs are divided into three groups and within each group there are also separate rates for various values of the inherited property. Category A includes the spouse, children, grandchildren and parents and the rate is between 0 and 10%. For category B, including great-grandchildren, grandparents and great-grandparents, siblings etc., it is from 0 to 20% and for the rest in the category C it is from 0 to 40%.
: Inheritance tax is 10%. The first ISK 5,757,759 is tax free.
: The taxation of inheritance depends on the value of the property inherited. There are different 5 tax rates. To the value of IQD 20 million the inheritance is tax free. From IQD 20 million to IQD 30 million the rate is 3%, from IQD 30 million to IQD 60 million it is 4%, from IQD 60 million to IQD 90 million 5% and the highest is for inheritance over IQD 90 million 6%.
: Inheritance tax is usually 33%, however there are some exceptions in the form of thresholds. The threshold is different for different groups of recipients of inheritance, depending on the relationship to decedent. In Group A there are children, or grandchildren or parents, the threshold for zero tax rate is €335, 000. For Group B, which includes siblings, nieces and nephews and other linear ancestors, the threshold for tax free inheritance is €32,500 and for the last Group C of everyone else it is €16, 250. There are also some other exceptions.
: tassa di successione. Abolished in 2001 and reestablished in 2006. 1,000,000 exemption on a bequest to a spouse or child, and a maximum rate of 8%.
: : paid as a national tax Japan has the highest inheritance tax rate in the world.
: is paid as a national tax. After the death of Lee Kun-hee, then-chairman of the Samsung Group, in 2020, his heirs are facing a $10 billion inheritance tax bill.
: mantojuma nodoklis: for 2 people if 1) they are not related: 7.5% and additional 7.5% if it is an estate; 2) if they are related and they lived together: 0.25% and additional 0.25% if estate; 3) if they are related and they did not live together: 0.5% and additional 0.5% if estate
: There is an inheritance tax levied. The law distinguishes between two types of inheritance collected by two groups on heirs. First is the legal part "collected by the heir according to their capacity". This means what proportion should the heir receive given by the relationship to the decedent. Second is the extra-legal part "collected by the heirs as a result of a will, donation, etc.". This means something more than the legal part, given by some document. Generally, rates for extra-legal part are higher. For both parts rate is 0% between spouses and all rates depend on the relationship to the decedent.
: Successierecht. NB. as per 1 January 2010 Successierecht has been abolished for the erfbelasting regime, and is replaced with Erfbelasting with rates from 10% to 40% for brackets by amounts and separation. Sizeable exemptions are given based on separation. As an example, in 2019, these exemptions roughly equalled EUR 651k for partners, EUR 20k for children, EUR 2k for grandchildren and 40k for parents.
: inheritance and gift tax applies to the estate and is regulated by the Act on Inheritance and Donation Tax. Tax rates vary from 3% to 20% depending on the value of the inherited estate and relationship with between the deceased and the beneficiary. Close family members can benefit from the inheritance tax exemption provided that the tax office is notified about the inheritance acquisition within a statutory deadline.
: Tax rate is dependent on the amount of inheritance and also on the connection to the decedent. It ranges from 0 to 40%.
: No national inheritance tax. Some cantons impose estate taxes or inheritance taxes.
: Impuesto sobre Sucesiones. The amendment of Spanish law has been put into practice, in compliance with the European Court ruling of 3 September of last year, and on 31 December 2014, Order HAP/2488/2014, of 29 December, was published in the Official State Bulletin, which approves the Inheritance and Gift Tax self-assessment forms 650, 651, and establishes the place, form and term for its submission.
: The government introduced inheritance tax starting on 1 January 2016. It only applies to estate of more than 100 million baht.
: There is so called registration fees applied also on inheritance. There are four rates of the fee depending on the kinship with the decedent. The lowest rate is 2,5% of the inherited goods value applying for ancestors and descendants, then 5% rate for siblings, 25% for uncles, aunts, nephews, nieces, and cousins and the highest 35% rate for everyone else, who inherits something.
: Inheritance in Turkey is subject of Inheritance and gift tax with tax rates between 1% and 30%. This tax is payable over a period of three years. This can be done in biannual installments in May and November.
: In Ukraine, there is no inheritance tax, but amount inherited is taxed as ordinary income and therefore is subject to personal income tax at 0%, 5% or 18%.
: see inheritance tax in United Kingdom
: see estate tax in the United States
: Income from inheritance is taxed as non-employment income in one category with income from gifts and winning prices at 10% tax rate.
: Impuesto sobre Sucesiones y Donaciones The estate and gift tax in Venezuela is imposed on inheritance as well as on gifts and other benefits. The tax rate is dependent on the kinship between the decedent and the one, who receives the inheritance.

Some jurisdictions formerly had estate or inheritance taxes, but have abolished them:

: Abolished the federal estate tax in 1979, and Australian State inheritance taxes were abolished between 1978 and 1982. In 1985, capital gains tax was introduced to tax capital gains on disposal of all assets. But as death is not treated as a disposal, it is only if and when assets are sold after death that capital gains tax is payable. A significant exemption from capital gains tax is the family home, which is exempt from tax if sold within 2 years of death.
: abolished the Erbschaftssteuer in 2008. This tax had some of the features of the gift tax, which was abolished at the same time
: abolished inheritance tax in 1972. However, capital gains are 50% taxable and added to all other income of the deceased on their final return.
: daň dědická. Cancelled in 2013 and is not paid since 1 January 2014. All income from inheritance is now exempt from all taxes. Before the reform there was a system of inheritance tax rates depending on the amount inherited and relationship to decedent.
: : There is no inheritance tax, however the income from inheritance is a subject of the personal income tax, which is at rate 20% and there are also some exempts from the taxation.
: abolished estate duty in 2006 for all deaths occurring on or after 11 February 2006.
: had an estate tax from 1953 to 1985
: abolished inheritance tax in 1981, but inherited assets are subject to a 20% to 45% capital gains tax upon their sale
: abolished estate duty tax by virtue of the Estate Duty Act No. 10 of 1982
: The tax was abolished in 1991 and there are still discussions about reintroducing going on.
abolished estate duty in 1992
: abolished inheritance tax in 2014
"abolished" "inheritance tax" in 2006, but have "fee" with rates of 0.3% up to 100,000 rubles, and 0.6% up to 1,000,000 rubles.
: abolished estate tax in 2008, for deaths occurring on or after 15 February 2008.
: a unanimous riksdag abolished the inheritance tax in 2004. A retroactive decision exempted deaths during late December 2004 from inheritance tax, due to the many Swedish casualties in the 2004 Indian Ocean earthquake.
: the inheritance tax was abolished in 2004, however, there is still a tax called Stamp Duty, applied at a flat rate of 10% on the value of assets located in the country. Nonetheless, spouses, children, grandchildren, parents, and grandparents, since 2009, are exempt from this tax. Stamp Duty applies to real estate, registrable movable assets, and others, but does not apply to personal use items, such as clothes or jewelry, nor to life insurance or pensions from Social Security. It is important that all heirs, including those exempt, declare the assets received to the Tax Authority. The calculation of Stamp Duty, especially for real estate, is based on the property's Taxable Asset Value. Legitimate heirs are required to declare these assets, even though they are exempt from paying the tax.
: Daň z dedičstva. An inheritance tax in Slovak Republic was canceled in 2004, but there are still some exceptions when you are obligated to pay some tax.
:The tax was abolished for close relatives, but there is still 18% general tax rate and 9% rate applying to residential property.
: There are three degrees of succession and for each there is different tax rate. For the first degree there is 0% tax rate, for the second 1,5% and for the third 2.5%.

Some jurisdictions have never levied any form of tax in the event of death: