Reply to Is it wrong to want an inheritance early?

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[quote=Anonymous][quote=Anonymous]Hi, I'm following this thread from the UK.

Do you not pay inheritance tax in the US?

In the UK it is not uncommon (not saying it happens all the time) for an elderly, widowed parent to give money to their children as an 'early inheritance'. The law says if the parent lives at least another 7 years from the date the money was given then there is no inheritance tax to pay.

There is a sliding scale of tax. If the parent dies the day after they gave their children the money then 40% inheritance tax is payable by the recipient. If the parent dies a week before the 7-year period is up, then the amount of inheritance tax payable is only a fraction of the 40%.[/quote]

We technically do but it only applies to very large estates (say $11 million and up) and even those people usually find a way around it, so while we do have a rule that gifts made within 3 years of death can be taxed as part of the estate it doesn't affect that many people.

Interestingly, nursing home care is one of the areas where we have a form of national health insurance but eligibility is limited to those with few assets so we also have a version of your sliding scale tax for people trying to use govt insurance for nursing home where assets they've given away during the preceding 5 years reduce eligibility.[/quote]

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