Inheritance Tax


DEFINITION of 'Inheritance Tax'

In some states in the U.S. (and in the United Kingdom), a tax imposed on those who inherit assets from a deceased person. The tax rate for inheritance taxes depends on the value of the property received by the heir or beneficiary and his/her relationship to the decedent.

Inheritance tax is known in some countries as a "death duty" and is occasionally called "the last twist of the taxman's knife".

BREAKING DOWN 'Inheritance Tax'

Inheritance tax is not the same as estate tax, which is imposed on the total value of a person's estate when that person dies. Rather, inheritance tax is imposed on the property that is passed to an heir.

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    A basic trust in which the beneficiary has the absolute right ...
  2. Final Return For Decedent

    The final tax return filed for an individual in the year of that ...
  3. Estate Tax

    A tax levied on an heir's inherited portion of an estate if the ...
  4. Heir

    HeirA person who inherits some or all of the estate of another ...
  5. Charitable Remainder Trust

    A tax-exempt irrevocable trust designed to reduce the taxable ...
  6. Estate

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