How Inheritance Tax Affects Families Of The Deceased?
Inheritance tax is a tax usually paid when property passing from an individual to another. Inheritance tax is most commonly associated with death, but it may occur during marriage if one spouse makes gifts of personal property from the estate property of the other.
Inheritance tax is a tax levied on the transfer of property between individuals. The tax is assessed on the worldwide gross estate of the deceased, with a reduced rate applying to transfers to spouses, children, parents, grandparents, grandchildren, brothers and sisters, and lineal descendants of all these relatives. You can also check out this link to know more about inheritance tax.
In some cases, where an estate is split between more than six family members, each individual will be taxed at a different rate on their share. Inheritance tax should not be confused with a capital gains tax (CGT), which is levied on profits made from the sale of assets. Inheritance tax applies only to property – not income – transferred during a person’s lifetime or after they die.
This means that assets such as stocks, bonds, real estate and cash held in savings accounts are not subject to inheritance tax. There are several ways to reduce or avoid inheritance tax: investing in trust funds for your children that will pay out over their lifetimes.
Inheritance tax is paid by the person who inherits the money, not the person who earns it. This means that if you pass on your money to your children, they will have to pay IHT on their share of the inheritance.