Avoiding Inheritance Tax

As the wealthy in India take precautions against the reintroduction of inheritance tax,two methods are proving popular to avoid this much-feared tax.

One is to transfer assets to investment firms owned by heirs.

Another is to set up trusts in which the heirs become beneficiaries.

Since the inheritance tax or estate duty is a tax on the transfer of wealth after a person’s death, no duty is attracted if the assets are transferred to entities or vehicles that are not persons.