how does inheritance tax work?
This is the cut and paste version from the www.irs.gov web site. Filing an Estate Tax Return An estate tax return, Form 706, must be filed if the gross estate, plus any adjusted taxable gifts and specific gift tax exemption, is more than the filing requirement for the year of death. Adjusted taxable gifts is the total of the taxable gifts you made after 1976 that are not included in your gross estate. The specific gift tax exemption applies only to gifts made after September 8, 1976, and before 1977. Filing requirement. The following table lists the filing requirement for the estate of a decedent dying after 2001. Year of Death: Filing Requirement: 2002 and 2003 1,000,000 2004 and 2005 1,500,000 2006, 2007, and 2008 2,000,000 2009 3,500,000 More information.
Inheritance tax is also known as estate tax or death duty. Inheritance tax arises after the death of an individual. In the United Kingdom, death duty was first started as a tax that was charged on the estates of deceased people in England and Wales over a particular value from 1796. At that time these duties were called legacy, succession and estate duties. The value of estate duty changed over the period of time and the duty was extended. By the year 1857, any estate over £20 was taxable, but duty was never really collected on them. Only an estate priced over £1500 was taxed. Death duties were first started in the year 1894, and for the next 100 years, these were responsible for crumbling down of many large estates.
