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

    All of the valuable things an individual owns, such as real estate, ...
  2. Estate Planning

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

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

    Section 2035 of the tax code, which stipulates that assets that ...
Related Articles
  1. Top 7 Estate Planning Mistakes
    Retirement

    Top 7 Estate Planning Mistakes

  2. Tax-Efficient Wealth Transfer
    Taxes

    Tax-Efficient Wealth Transfer

  3. 4 Ways To Minimize Estate Taxes
    Taxes

    4 Ways To Minimize Estate Taxes

  4. Uncle Sam's Surprise: Unexpected Sources ...
    Taxes

    Uncle Sam's Surprise: Unexpected Sources ...

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center