The Wall Street Journal has a great article today discussing how the U.K., France, and Germany handle inheritance. Here are the highlights:
U.K.
- In 2007/2008 tax year the inheritance tax generated more than £3.8 billion ($5.7 Billion) for the Treasury
- Residents who are domiciled in the U.K. the first £325,000 of an estate is charged at 0% and the balance at 40%
- A 2007 change allows married couples and registered civil partners to inherit the unused inheritance tax allowance of their deceased partner (The second partner who dies could effectively apply a £650,000 allowance).
- Trusts are not as popular anymore because of a 20% upfront tax charge on transfers into trusts
- A person can give £3,000 a ear without incurring inheritance tax
France
- Inheritance taxes are charged to the beneficiaries rather than the estate
- Rates vary depending on relationship between decedent and the beneficiary
- Non-relatives pay up to %60 with nearly no tax-free allowance.
- Surviving spouses are exempt from inheritance tax (not from tax on lifetime gifts
Germany
- Inheritance tax or gift tax is also paid by the beneficiary
- Applicable rate ranges from 7% to 50% depending on relationship to the decedent or donor and on the value of the gift or share of the estate
- Each beneficiary is entitle to a personal exemption of €500,000 (675,200) for spouses and registered same-sex partners to €20,000 for non-relatives
- Real estate and businesses are valued depending on who receives the property and how long the person lives after receiving the property