Introduction

In an inheritance, money passes from one party to another, and supporters say this money should be taxed, just like income or taxable gifts.

But what is inheritance tax? Is it different from estate tax? Why is there a tax on death? And how does this "death tax" work?

indeed, as you will find out on the following pages, inheritance tax is not the same as estate tax, though they do share some similarities and follow some comparable procedures. Inheritances are subject to some tax exemptions. And though inheritance tax rates can be high, they work in different ways depending on the inheritance and the state you live in.

Inheritance Tax is a tax which can arise where a beneficiary receives an inheritance as a result of someone dying. The beneficiary is responsible for paying the tax. As outlined earlier, an inheritance can be taken under a will or intestacy - or in some other way such as, for example, where an asset in the joint names of the deceased and another person is taken, on the death of the deceased, by that other person as survivor.

Inheritance Tax is basically the tax your "estate" must pay on your assets when you die. It is a variable tax, and one of growing concern for more and more people. Certainly, it is no longer limited to the very wealthy.

Fortunately, it is also a tax which can be planned for, and which certain mitigations can be deployed.

Opponents of inheritance tax who sometimes call it “death tax” say it’s immoral to place a financial burden on a family that has just suffered the loss of a loved one. Proponents say that death taxes are good sources of revenue for governments because the taxes apply only to the wealthy.

Death tax. Estate tax. Inheritance tax. People refer to it by many names, and opinions on its morality and constitutionality abound.