Death tax - its a geographic lottery

Death tax - its a geographic lottery

Death tax – its a geographic lottery

by | Uncategorised

Where you reside and where you were born will have a huge impact on whether or not your death is taxable.

Death or inheritance tax is treated differently throughout the world.  Some countries penalise their citizens regardless of where they reside.  In contrast other countries tax the legacy recipient on interest earned from the gift.  The approach is often related to the countries cultural and economic climate.

The USA death tax is state specific.  New Jersey have agreed to repeal estate tax by 2018.  There will be an initial hike of the threshold from USD675k to USD 2million before the abolition for state residents.  They have not yet addressed the issue of Inheritance Tax for non-linear descendants.  Additional announcements are expected.

In complete opposition the Mexican government is currently discussing the introduction of taxes on large inheritances and donations on a progressive scale.  This could be in place in 2017.  The highest tax band would be 30%.  Consequently estate planning is becoming a hot topic in Mexico.

Other countries are looking at investors and the gains made on assets.  Canada and the UK are both restricting loopholes on foreign owned property.  As a result, so-called tax avoidance vehicles are being wound up and estate planning becomes critical for non-residents as well as residents.

If you have assets in more than one country or have been away from ‘home’ for some time you need to clarify your position.  Who is going to tax you and where?  Act now to ensure that your legacy goes where you want it too.  Further advice is available from Wills Worldwide.

 

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