Protection from Inheritance Taxes

| 28 Jan 2013 | 3 Comments

The latest developments in the wealth management industry prevail from the USA and China, where inheritance tax concerns and portfolio diversification become top priority.

NEBRASKA, USA – Inheritance tax has also become a topic of conversation in Nebraska due to a recent proposal by a Nebraska lawmaker to lower the state’s inheritance tax rates.

The new bill created by Senator John Wightman of Lexington comes as a welcomed boost to families of all income brackets, as it would reduce the rates of tax that both relatives and non-relatives would pay on inheritance.

Inheritance tax, once overshadowed by the ongoing woes of rising income taxes, has become a topic of concern for many Americans, especially for those receiving large inheritance sums.

The proposed bill is expected to set a new tax rate on inheritance as follows:
– 9% tax on property valued over $15,000 (currently 13%). This applies where the recipient of the property is a relative.
– 13% tax on property valued over $10,000 (currently 18%). This applies to recipients who are not related to the testator.

CHINA – China’s wealthy have taken to diversifying their investment portfolios to include insurance policies in a bid to avoid inheritance tax – despite the country not having a tax on inheritance yet.

The concerns of wealthy individuals with regards to inheritance is evident, and industry insurance experts have revealed a heightened interest in insurance plans. Experts have cited that an insurance policy in Shenzhen with a guaranteed payout of over 100 million Yuan would effectively duplicate as a viable tax avoidance scheme.

The newfound popularity of insurance policies for the protection of inheritance tax purposes has been brought about due to recent speculation that some first tier cities will impose an inheritance tax in the near future.
Rich list set to grow

According to a report published by the China Daily, China’s high net worth group is expected to grow by a staggering 20% year on year until 2015, making the overall number an estimated 2 million high net worth individuals living in China. Any form of introduction of inheritance tax would therefore directly affect the wealth management and investment portfolios of the rich.

Wealthy individuals should be aware that some insurance companies may use the ‘tax avoidance’ angle to promote insurance policies and gain more business, so it is important that proper precautions are taken and advice obtained from a reputable financial advisor.

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Category: Hottest Articles, Wealth Management

Comments (3)

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  1. Paul L Cook says:

    If the majority of my wealth is domiciled in St Kitts by way of a bank ownership there with dual citizenship and since a corporation, wherever it is domiciled and since a corporation is living breathing entity, would it be subject to a US inheritance tax. What is, if there is any, the inheritance tax in St Kitts?


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  2. Paul L Cook says:

    Thank you and your corporation for being there when so many people need you, especially in these economic and troubling times

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