What are some common misconceptions about inheritance tax?

What are some common misconceptions about inheritance tax?

Many people believe that inheritance tax applies to all estates, but that's not true. In many places, only estates above a certain value are taxed.

Do only wealthy people have to worry about inheritance tax?

Not necessarily. While higher-value estates are more likely to incur taxes, some middle-class estates can also be affected depending on local laws.

Is inheritance tax the same as estate tax?

No, they are different. Inheritance tax is paid by the beneficiaries, while estate tax is paid by the estate before distribution.

Can I avoid inheritance tax through gifting?

Gifting can reduce the taxable estate, but there are limits and rules regarding how much you can gift without incurring taxes.

What should I do if I think I might owe inheritance tax?

It's best to consult with a tax professional or estate planner who can provide guidance based on your specific situation.