Legal Definitions - death duty

Death Duty

A death duty refers to a tax imposed by a government on the transfer of a deceased person's property and assets to their heirs or beneficiaries. This tax is typically calculated based on the total value of the estate before it is distributed. Depending on the specific legal framework of a jurisdiction, it may also be known as an estate tax (a tax on the estate itself) or an inheritance tax (a tax on the recipient of the inheritance).

• Example 1: The Wealthy Beneficiary

  When a prominent business owner passes away, leaving behind a substantial portfolio of real estate, stocks, and valuable art, the government will assess the total worth of these assets. A portion of this total value will be collected as a death duty before the remaining assets can be distributed to their children and other designated heirs.

• Example 2: The Family Home

  A couple jointly owns their family home. Upon the death of one spouse, if the home's value exceeds a certain threshold set by law, a death duty might be levied on the deceased spouse's share of the property before it fully transfers to the surviving spouse or other beneficiaries, depending on how the property was owned and the specific tax laws in that jurisdiction.

• Example 3: Overseas Assets

  An individual who lived in one country but owned significant investment properties in another country passes away. The country where the properties are located may impose its own form of death duty on those specific assets, even if the deceased's primary residence and other assets are subject to a different tax regime in their home country. This illustrates how death duties can apply to assets across different jurisdictions.