What is the inheritance tax for 2018?
The inheritance tax, also known as estate tax, is a tax imposed on the transfer of property from a deceased person to their heirs. In 2018, the inheritance tax rules and rates varied depending on the country and the specific circumstances of the estate. This article will provide an overview of the inheritance tax for 2018, focusing on the United States, the United Kingdom, and Germany.
In the United States, the federal inheritance tax was eliminated in 2010, but some states still impose their own inheritance tax. For those states that do have an inheritance tax, the rates and exemptions can vary significantly. In 2018, for example, New York had a flat rate of 16% on estates over $3.1 million, while Ohio had a graduated rate ranging from 6% to 16% on estates over $3.25 million.
In the United Kingdom, the inheritance tax rate for 2018 was 40%. However, this rate only applied to the portion of an estate valued over £325,000. For individuals who left everything to their spouse, civil partner, a charity, or a community amateur sports club, the threshold was £500,000. Additionally, certain gifts made up to seven years before death were subject to a reduced rate of 36%.
Germany also had a progressive inheritance tax in 2018, with rates ranging from 7% to 50%. The rate was determined based on the relationship between the deceased and the heir. For example, children and grandchildren were subject to a lower rate, while siblings and nieces/nephews were subject to a higher rate. The tax was only applicable to estates valued over €600,000 for individuals and €1.2 million for married couples.
It is important to note that these rates and thresholds are subject to change, and it is crucial for individuals to consult with a tax professional to understand the specific inheritance tax rules that apply to their situation. Planning for inheritance tax can help minimize the tax burden on heirs and ensure a smooth transfer of assets.
