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. Inheritance

    All or part of a person's estate/assets that is given to an heir ...
  4. Three-Year Rule

    Section 2035 of the tax code, which stipulates that assets that ...
  5. Estate

    All of the valuable things an individual owns, such as real estate, ...
  6. Inheritance Tax

    In some states in the U.S. (and in the United Kingdom), a tax ...
RELATED FAQS
  1. Does the tradeoff model or the pecking order play a greater role in capital budgeting?

    The static trade-off theory and the pecking order theory are two financial principles that help a company choose its capital ... Read Full Answer >>
  2. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
  3. What kinds of financial instruments are designated as “Securities” by Cabinet Order?

    In Japan, securities are regulated by the Diet and the Financial Services Agency, or FSA. Rulings about securities come down ... Read Full Answer >>
  4. How is money supply used in monetary policy?

    Regulating the money supply is the sole tool of the Federal Reserve's monetary policy. The Federal Reserve can affect the ... Read Full Answer >>
  5. How can a nation adopt an export policy based on the economies of scope?

    A nation as a whole can adopt an export policy based on the economies of scope by focusing production on goods and services ... Read Full Answer >>
  6. What is the difference between income tax and capital gains tax?

    The conceptual difference between income tax and capital gains tax is that income tax is the tax paid on income earned from ... 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. Options & Futures

    Leaving Inheritance To Children Easier Said Than Done

    Consider your own retirement needs when deciding whether to leave an inheritance.
  6. 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.
  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

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
  9. Economics

    Why Working Doesn't Add Up For Many Women

    A type of tax deduction for Japanese stay-at-home wives puts a barrier on women working full time in the country.
  10. Economics

    Chinese Opportunities For A Changing Child Policy

    China's one-child policy is changing, and investors are looking for ways to cash in. The reform might not have the effects that many anticipate, however.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center