Capital Transfer Tax

AAA

DEFINITION of 'Capital Transfer Tax'

An inheritance tax levied in the United Kingdom on estates exceeding a certain value. The Capital Transfer Tax replaced the general estate duty in 1975, and was itself replaced by the Inheritance Tax (IHT) in 1986. The amount of tax was derived from the value of the deceased's assets transfered within a certain time of the death (both real estate and personal), less charitable gifts.

INVESTOPEDIA EXPLAINS 'Capital Transfer Tax'

Capital transfer taxes and other inheritance taxes make up a small portion of taxes collected in the United Kingdom. This is partially due to the nil rate band, which is the range of estate values that are excluded from the tax, as well as the various methods for avoiding its payment. Gifting an estate to charities or family members or creating a trust were two avoidance methods used.

RELATED TERMS
  1. Estate Planning

    The collection of preparation tasks that serve to manage an individual's ...
  2. Heir

    HeirA person who inherits some or all of the estate of another ...
  3. Three-Year Rule

    Section 2035 of the tax code, which stipulates that assets that ...
  4. Inheritance

    All or part of a person's estate/assets that is given to an heir ...
  5. Inheritance Tax

    In some states in the U.S. (and in the United Kingdom), a tax ...
  6. Estate

    All of the valuable things an individual owns, such as real estate, ...
RELATED FAQS
  1. Where on my 1040 form do I report AGI (adjusted gross income)?

    On a standard IRS Form 1040, you add up and report adjusted gross income, or AGI, on line 37. Line 37 appears on the first ... Read Full Answer >>
  2. What is the difference between AGI (adjusted gross income) and net income?

    Adjusted gross income, or AGI, is often referred to as "net income," although the two are not necessarily the same thing. ... Read Full Answer >>
  3. What are the deductions taken to determine AGI (adjusted gross income)?

    The Internal Revenue Service, or IRS, allows for specific deductions to be taken from your total gross income. These deductions ... Read Full Answer >>
  4. What is the difference between disposable and discretionary income?

    According to the Bureau of Economic Analysis, or BEA, disposable income is the amount of money an individual takes home after ... Read Full Answer >>
  5. How can I obtain an abatement for property taxes?

    Depending on where your property is located, your local city or county government may offer a property tax abatement program. ... Read Full Answer >>
  6. How will a value added tax impact the government budget?

    In 1992, the Congressional Budget Office conducted an economic study on value-added tax, or VAT. At the time, the CBO concluded ... Read Full Answer >>
Related Articles
  1. Retirement

    Top 7 Estate Planning Mistakes

    Many people try to avoid this process altogether, making things difficult for heirs.
  2. Taxes

    Tax-Efficient Wealth Transfer

    Taxpayers with large taxable estates were required to take steps to reduce them before 2011.
  3. Taxes

    4 Ways To Minimize Estate Taxes

    These four strategies will ensure that most of your money goes to your loved ones, and not to the government.
  4. Taxes

    Uncle Sam's Surprise: Unexpected Sources Of Taxable Income

    When you get an unexpected check, don't be surprised when the tax man shows up to collect his share.
  5. Personal Finance

    Get Ready For The Estate Tax Phase-Out

    Changes to federal legislation will affect how your assets are treated once you're gone - be prepared.
  6. Options & Futures

    Leaving Inheritance To Children Easier Said Than Done

    Consider your own retirement needs when deciding whether to leave an inheritance.
  7. Retirement

    Saving Money With A Private Annuity Trust

    Learn about a strategy that could help you reduce taxes, diversify your portfolio and generate income.
  8. Taxes

    6 Reasons to Use a Household Help Agency

    It's not just because they find you well-qualified workers. Agencies spare you the paperwork and taxes required when you hire on your own.
  9. Taxes

    8 Things To Know Before Hiring Household Help

    Here's how to avoid the legal, tax and trust issues that can trap you when you become an employer.
  10. Economics

    What Should Everyone Know About Greece’s Debt

    We weigh in on the top four things everyone should know about Greece's debt.

You May Also Like

Hot Definitions
  1. Radner Equilibrium

    A theory suggesting that if economic decision makers have unlimited computational capacity for choice among strategies, then ...
  2. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  3. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  4. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  5. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  6. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!