Inheritance Tax refers to a tax imposed on the estate or the value of property inherited by an individual following the death of another person. The tax is typically levied on the beneficiary receiving the assets, and the rate may vary depending on the relationship between the deceased and the heir, as well as the total value of the inheritance.
In many jurisdictions, immediate family members, such as spouses or children, may be exempt from this tax or subject to lower rates, while more distant relatives or non-relatives might face higher rates. The specific rules governing inheritance tax can vary widely between different regions and can include exemptions, deductions, and progressive tax rates based on the value of the inheritance.
For example, if a person inherits a property valued at $500,000 and the local inheritance tax rate for non-family members is 10%, the tax liability for the inheritor would amount to $50,000.
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