Inheritance tax is a tax levied on estates that are passed down from one generation to another upon the death of a loved one. This type of tax applies to individuals who inherit the estate of their family members, or receive any gifts that are over the exemption amount. It is an important issue for business professionals because it can affect the transfer of a business or family heirlooms.
Recent Changes in Inheritance Tax Laws
Inheritance taxes have recently undergone changes as different countries modernize their tax laws. In the United States, tax laws regarding inheritances have become more lenient for most citizens, with the exemption amount for estate taxes recently doubled. As an example, there is now an exemption up to $12.92 million on the federal estate tax for individuals who pass away in 2023.
Who Needs to Pay Inheritance Tax?
Inheritance tax laws vary by country, however in most cases, those who receive gifts or inheritances that are over a certain amount are subject to the tax. In some cases, inheritance taxes may be due immediately after receipt of the inheritance, or in annual installments. It is important for business professionals to understand the tax laws in their countries, so they can plan accordingly and take advantage of available tax exemptions.