IHT Meaning and
Definition
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IHT is an abbreviation that stands for "Inheritance Tax." Inheritance tax is a levy imposed by the government upon the transfer of assets or property from a deceased person to their beneficiaries. It is primarily based on the value of the estate left behind by the deceased individual. The purpose of this tax is to generate revenue for the government by redistributing wealth from one generation to another.
IHT is usually determined by the value of the estate above a certain threshold, referred to as the "nil-rate band" or "exempt band." The tax rates and thresholds associated with IHT may vary depending on the country or jurisdiction. Typically, close relatives such as spouses or civil partners tend to receive exemptions or reduced tax rates.
To calculate the IHT liability, the value of the estate is assessed by considering all the assets, including property, investments, savings, possessions, and even gifts made by the deceased during their lifetime. Certain reliefs and exemptions, such as gifts to charity or transferring assets within the family, may help reduce the tax liability.
It's important for individuals to plan their estate carefully, as IHT can significantly impact the amount of inheritance passed on to their loved ones. Professional advice from estate planners or tax advisors is often sought to mitigate the impact of IHT and ensure a smooth transfer of assets to beneficiaries.
Common Misspellings for IHT
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