Certain property such as a personal residence and personal chattels passing to a surviving spouse and certain pension benefits are exempt from the estate tax. There is a NZ$2,000 ($1,182) annual gift tax exemption per donor per donee. Norway Norway imposes an inheritance tax and a gift tax. All transfers by residents are subject to the taxes. Transfers by nonresidents of immovable property located in Norway also are subject to the taxes. Interspousal transfers are exempt from tax. For transfers to all others, the first Nkr100,000 ($14,269) is exempt from tax: There are two classes of transferee: children and parents, and all others, including charities. The first Nkr300,000 ($42,808) of taxable transfers are taxed at a marginal tax rate of eight percent for children and parents and at 10 percent for all others. For taxable transfers in excess of Nkr300,000 a marginal tax rate of 20 percent is imposed on children and parents and a marginal tax rate of 30 percent is imposed on all others. There is a supplemental inheritance tax levied on heirs with private wealth of Nkr50,000 ($7,135) or greater. These supplemental rates begin at two percent and rise to 15 percent for heirs who already possess private wealth in excess of Nkr500,000 ($71,347). The Philippines The Philippines imposes an estate tax and a gift tax. The first 200,000 Philippine pesos ($7,633) 16 of the estate are exempt from tax. The marginal estate tax rates begin at five percent on the first 300,000 Philippine pesos ($11,450) of a taxable estate and rise to 35 percent for taxable estates in excess of 9.8 million Philippine pesos ($374,032). The Philippine gift tax distinguishes between gifts to siblings, ancestors, spouses, descendants, and collateral relatives to the fourth degree and all other donees. The first 50,000 Philippine pesos ($1,908) of gifts per donee of any type are exempt from the gift tax annually. For gifts to the designated class of relatives, the marginal gift tax rates begin at 1.5 percent on the first 50,000 Philippine pesos of taxable gifts and rise to 20 percent for taxable gifts in excess of 4.8 million Philippine pesos ($183,199). Gifts to all other persons are taxed at a flat 10-percent rate after the 50,000 Philippine peso exemption. Portugal Portugal imposes an inheritance tax and a gift tax. The tax applies to both residents and nonresidents on assets situated in Portugal. 17 The first Esc700,000 ($4,242) transfers are exempt from tax. In addition, Esc200,000 ($1,212) of shares transferred to each heir are exempt from tax. There is lifetime aggregation of gifts for purpose of the gift tax. 16 Philippine pesos converted to U.S. dollars using the exchange rate prevailing on September 30, 1994. 17 Debt is considered located in Portugal if the creditor is located in Portugal. For taxable transfers there are five different tax rate schedules: minor and incapacitated children; spouse and descendants; ascendant and siblings; uncles, aunts, nephews, and nieces; and all others. For minor and incapacitated children, marginal tax rates begin at 4.6 percent on the first Esc2.05 million ($12,424) of taxable transfers and rise to 26.45 percent on taxable transfers in excess of Esc67.8 million ($410,909). For spouses and descendants, marginal tax rates begin at 6.9 percent on the first Esc 2.05 million of taxable transfers and rise to 28.75 percent on taxable transfers in excess of Esc67.8 million. For ascendant and siblings, marginal tax rates begin at 11.5 percent on the first Esc2.05 million of taxable transfers and rises to 36.8 percent on taxable transfers in excess of Esc67.8 million. For uncles, aunts, nephews, and nieces, marginal tax rates begin at 19.55 percent on the first Esc2.05 million of taxable transfers and rises to 51.75 percent on taxable transfers in excess of Esc67.8 million. For all other transfers, marginal tax rates begin at 23 percent on the first Esc2.05 million and rises to 57.5 percent on taxable transfers in excess of Esc 67.8 million. Life insurance and pension assets are exempt from the transfer taxes. Real estate is valued at a capitalized value of its current rental income. To account for certain personal property if not specifically valued (e.g., household furnishings) the value of the estate is increased by a rate that increases at marginal rates that rise from three percent for estates initially valued at Esc500,000 ($3,030) or less to 15 percent for estates valued in excess of Esc10 million ($60,606). Singapore Singapore imposes an estate tax, but no gift tax. The tax applies to all property in the estate of an individual domiciled in Singapore at the time of his death. Non-resident decedents are subject to the tax on any real or personal property situated in Singapore at the time of death. The first S$500,000 ($327,439) of all property is exempt from the estate tax. In addition, the first S$3 million ($1.965 million) of residential property and the first S$500,000 of the decedent's interest in the Central Provident Fund or any designated pension or provident fund is excluded from the estate. Certain other investments also are excluded from the taxable estate. The first S$10 million ($6.549 million) of the taxable estate is taxable at a five percent rate. Amounts in excess of S$10 million are taxed 10 percent. Spain Spain imposes an inheritance tax and a gift tax. The taxes apply to all transfers by residents and to transfers of assets located in Spain of nonresidents. The Spanish inheritance and gift tax exempts the first Ptas2,386,000 ($17,940) from tax for spouses and direct or adopted descendants. Siblings, uncles, aunts, nephews, nieces, and ascendant and descendants by marriage are exempt on the first Ptas 1,193,000 ($8,970) of transfers. In addition, a disabled person is exempt on an additional Ptas7,158,000 ($53,820) of transfers and transferees between the ages of 13 and 21 are exempt on an addi tional Ptas596,000 ($4,481) for each year over 13. Any gifts within a three-year period are aggregated for purpose of the exemption and computation of gift tax liability. Aside from the exemption amounts there are not different tax rate schedules for different categories of heirs. Marginal tax rates begin at 7.65 percent on the first Ptas1,193,000 ($8,970) of taxable transfers and rise to 34 percent on taxable transfers in excess of Ptas119,250,000 ($896,617). In addition, a net worth surcharge is applied to the transferee's tax liability which varies by category of heir and level of the heirs' wealth. The marginal rate of the surcharge can be as high as 140 percent for transferees who are distant relatives and whose net wealth exceeds Ptas600 million ($4.5 million). For spouses and descendants, the marginal rate of the surcharge reaches 100 percent for transferees whose net wealth exceeds Ptas600 million. To account for certain personal property if not specifically valued (e.g., household furnishings), the value of the estate is increased by three percent for estates less than Ptas20 million ($150,376) and by five percent for larger estates. Sweden Sweden imposes an inheritance tax and a gift tax. The tax applies to all property transferred by deceased Swedish citizens and resident foreigners, and to certain property left in Sweden by nonresident foreign citizens. There are three classes of taxpayers. Class I consists of spouses, lineal descendants, spouse of child, surviving spouse of a deceased child, step-child, adopted child or foster child, and their descendants. Class II consists of all other individual transferees. Class III consists of churches and Swedish institutions devoted to the public benefit. The first Skr280,000 ($36,477) of inheritance received by a spouse is exempt from tax. For other class I beneficiaries, the exemption is Skr70,000 ($9,119). For lineal descendants under age 18, the exempt amount is increased by Skr10,000 ($1,303) for each year the beneficiary is under age 18. For inheritances taxable under class II or class III, the first Skr21,000 ($2,736) is exempt. Gifts are exempt up to Skr2,000 ($261) per donor per year. 18 For class I beneficiaries, marginal tax rates begin at 10 percent on the first Skr300,000 ($39,083) of taxable transfers and rise to 30 percent on taxable transfers in excess of Skr600,000 ($78,166). For class II beneficiaries, marginal tax rates begin at 10 percent on the first Skr70,000 of taxable transfers and rise to 30 percent on taxable transfers in excess of Skr140,000 ($18,239). For class III beneficiaries, marginal tax rates begin at 10 percent of the first Skr90,000 ($11,725) of taxable transfers and rise to 30 percent on taxable transfers in excess of Skr170,000 ($22,147). Switzerland There is no taxation of transfers of property at death or by gift at the national level, but every canton save one imposes an estate or inheritance tax and two cantons impose both. All cantons save 18 A higher limit Skr10,000 applies for birthday and wedding gifts. two impose a gift tax. In addition, in some cantons the communes have the right to collect a surcharge on the cantonal tax. Such taxes generally apply to all transfers by residents and to transfers of immovable property located in Switzerland by nonresidents. The following information describes the inheritance tax applicable for Zurich. All transfers to a spouse are exempt. The first SF30,000 ($22,124) of transfers to direct descendants is exempt (SF40,000 ($29,499) if a minor child or handicapped individual). The first SF5,000 ($3,687) of transfers to others is exempt. In Zurich, for taxable transfers there are six different tax rate schedules: direct descendants; lineal ascendant; siblings; step children or step parents; uncles, aunts, and their descendants; and all others. For direct descendants, marginal tax rates begin at two percent on the first SF10,000 ($7,375) of taxable transfers and rise to six percent for taxable for taxable transfers in excess of SF500,000 ($368,732).19 Tax rates for lineal ascendant are twice those of direct descendants. Tax rates for siblings are three times those of direct descendants. Tax rates for stepchildren and step-parents are four times those of direct descendants. Tax rates for uncles, aunts, and their descendants are five times those of direct descendants. Tax rates for all others are six times those of direct descendants. Turkey Turkey imposes an inheritance tax and a gift tax. The tax applies to transfers by Turkish nationals on their worldwide property. Nonresidents are liable for tax on transfers of Turkish assets. The first TL5 million ($168) of inheritances are exempt to all heirs. A surviving spouse is exempt on the first TL10 million ($336), but only if there are surviving children. The first TL250,000 ($8.40) of gifts are exempt from tax annually. For taxable transfers there are three different tax rate schedules: spouses, children, and parents; grandparents and siblings and their children; and all others. For spouses, children, and parents, marginal tax rates begin at three percent on the first TL200,000 ($6.71) of taxable transfers and rise to 20 percent on taxable transfers in excess of TL12 million ($403). For grandparents and siblings and their children, marginal tax rates begin at seven percent on the first TL200,000 of taxable transfers and rise to 30 percent on taxable transfers in excess of TL12 million. For all others, marginal tax rates begin at 10 percent on the first TL200,000 of taxable transfers and rise to 44 percent on taxable transfers in excess of TL12 million. United Kingdom The United Kingdom imposes an estate tax and a gift tax. All transfers of property by persons domiciled in the United Kingdom and transfers of property situated in the United Kingdom by persons not domiciled are subject to tax. Transfers to a spouse are excluded from the taxable estate and exempt from gift tax. The first £ 150,000 ($231,125) is exempt from estate taxation. The first £3,000 ($4,622) of annual gifts is exempt 19 For taxable transfers between SF280,000 ($206,490) and SF500,000, the marginal tax rate is seven percent. from gift taxation.20 Beyond those exempt amounts, estates and gifts are taxed at a flat 40 percent tax rate. Tax rates applied to transfers at death or by gift of agricultural property and certain industrial plant, machinery, and equipment are 55 percent of the regular rate (22 percent). The value of a sole proprietorship or partnership interest in a farm or business or controlling interest in nonpublic companies are included in the estate or gift tax base at one-half their fair market value. Thirty percent of the value of minority holdings in nonpublic companies is excluded from the value of an estate or gift. Except in the case of working farmers, the value of such reliefs is limited to £500,000 ($770,416). 20 If unused, the 3,000 exemption may be carried forward for one year. |