INHERITANCE TAX
The future of inheritance tax With Covid-19 forcing governments worldwide to look at tax increases, Dennis Petri asks whether inheritance tax is in line to rise. Dennis Petri Chairman, UHY International
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he bill for Covid-19 tax reliefs, furlough schemes and economic stimulus packages is shortly coming due for governments around the world. Every finance minister is being forced to look at how they will address enormous deficits that could not have been imagined 12 months ago. Increasing rates or reducing reliefs on inheritance tax will certainly be under consideration in many economies. What does the current global picture of inheritance tax rates look like, and should inheritance tax be a prime target for tax increases in 2021 and beyond?
Inheritance tax rates
At UHY, we produced a study of inheritance tax rates across 28 countries in the UHY network
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before the pandemic. The study compared the “inheritance tax” paid on $3 million of cash. The calculations are based on the deceased having two heirs receiving an equal share – both adult, non-dependent children. Both the deceased and heir are tax residents in the country. The study found that, overall, those inheriting wealth in G7 and EU economies are taxed on average at a rate 10 times higher than those inheriting wealth in emerging economies. Individuals in G7 countries pay an average of 16.8% ($503,321) and those in EU countries pay an average of 10.9% ($325,775) in inheritance tax when passing on $3 million in cash to their beneficiaries. In comparison, individuals in emerging economies pay an average of just 0.9% ($28,429) when passing on $3 million in cash. ISSUE 115 | AIAWORLDWIDE.COM
