What is the Gift Tax Exclusion?

Gift tax is a type of property tax. A tax levied on the total amount of property that the property owner gave to others during his life minus the statutory deduction. Tax rates are often used in excess of progressive tax rates; regulations have a threshold and a range of reductions. Gift tax is a inheritance tax in a broad sense and is a supplementary tax of inheritance tax. The difference between gift tax and inheritance tax is that inheritance tax is the main tax, which is levied on the amount of inheritance after the death of the property owner. Death is a necessary condition for taxation; gift tax is a supplementary tax. The collection of property is not necessarily related to death. Western countries levy more gift taxes, the purpose of which is to supplement the deficiencies of inheritance taxes, and to prevent property owners from giving away their property to others to avoid paying taxes. ^[1]

Gift tax

Gift tax is a tax generally levied by many countries in the world, and it is also a tax with a long history. with

Gift taxes are levied in various countries and play a positive role in some aspects. This is one of the reasons that the two taxes can exist for a long time. They can be summarized as follows:

(1) Regulate social distribution. The state implements differentiated tax burdens through inheritance and gift taxes, and assigns a portion of the property of those with high inheritance to the society to support the lives and social welfare of low-income people, forming a virtuous circle of distribution in society.

(2) Increase fiscal revenue.

(3) Restricting private capital. In a modern society where disparity between the rich and the rich and intensified social contradictions, private capital is appropriately restricted to alleviate social contradictions.

(D) curb social waste.

Six Models of Legislative Practices of Gift Taxes in Various Countries

Levy

The economic effect of the gift tax is mainly manifested in the impact on the allocation of social resources. The collection of any tax will have an impact on the allocation of social resources, and the gift tax is no exception, mainly in the following aspects:

Impact on asset composition

Gift tax

The social effect of the gift tax levy is mainly manifested in fairness

The fiscal effect of the gift tax is mainly reflected in the impact on fiscal revenue. Gift tax as money

Taxpayer

In the United States, a donor is a taxpayer and is taxed based on the total value of the gift of property by the giftor within a certain period of time. This taxation method is called the total gift tax system. In Japan, the tax system is divided into grants, also known as the grantee tax system, that is, the gift tax is levied according to the value of the recipient's property within a certain period of time.

Taxable object

The taxable object of gift tax is also called taxable object, that is, the property obtained through gift. In principle, all unpaid transfers of property can be gifted, including movable, immovable, tangible and intangible property. In reality, all countries define the scope of gift tax collection by specifying the names of tax exemptions. In the United States, there are the following categories:

(1) Property donated to charity;

(2) Property donated to political groups;

(3) Property donated to the school;

(4) Mutual gifts between husband and wife;

(5) If one spouse dies, the property left by the spouse for the other's life;

(6) After the divorce of the couple, it is used as a gift to the other party for education and medical purposes.

In Japan, including:

(1) Property acquired as a result of a gift from a legal person;

(2) Property donated by the obligees as living expenses or education expenses;

(3) The portion of the gift property accepted by public welfare undertakings that is actually used for public welfare undertakings;

(4) Money and other property accepted in the election campaign for public office candidates.

In addition, Japan defines the following property benefits as quasi-gift properties and taxes them:

(1) Trust beneficiary rights. However, persons with disabilities are excluded from taxation because of the special disability support trust contract based on the special disabled person as a beneficiary.

(2) Insurance money. When the beneficiary of the insurance premium is not the policyholder, the cashed insurance premium is taxed.

(3) Regular payments. When the payer of the fixed payment is not the recipient, the fixed payment is taxed.

(4) Benefits due to low transfer. At a significantly lower price (when it is less than 1/2 of the market price), in the case of accepting the transfer, it is deemed that the acceptor has obtained an amount corresponding to the difference between the price and the property due to the gift of the transferor of the property. Taxes on this part.

(5) For the benefit of debt relief and other undertakings. When you do not pay the price or accept the benefits of debt forgiveness, transfer or repayment of debt by a third party at a significantly lower price, the benefits of debt forgiveness and other benefits are deemed to have been obtained and accepted as a result of the gift of the debtor. The price is equivalent.

(6) Other benefits.

Tax rate

The gift tax in the United States is a progressive tax system. Taxes below 10,000 USD are exempt, and those above 10,000 USD are subject to a certain base plus the product of the excess and the tax rate. The tax rate range fluctuates between 18% and 60% depending on the gift amount. However, if the amount of property transfer is above 21,040,000, 55% of the transfer amount will be directly paid for tax without adding a base. According to the latest amendments to the gift tax made by the U.S. in 2002, each U.S. citizen who has donated more than 10,000 US dollars (3,000 US dollars from 1932 to 1976) to a person in a year is subject to the gift tax. Citizens have 700,000 tax-free gifts and inheritance credits in their lifetime, which means that there is no tax on property transfers within this range.

In Japan, the basic deduction (currently 600,000 yen) and spouse deduction are deducted from the taxable price first. Spousal deduction is a deduction recognized when a marriage lasts for more than 20 years when receiving real estate for residence from the spouse or receiving a monetary gift of the real estate (a deduction of up to 20 million yen is recognized). The tax rate table is applied to the balance after deducting the above (the tax rate is between 10% and 70%, and more than 200 million yen, the 70% tax rate applies),

US and Japanese Gift Tax Development Trends

(1) Supervision has been continuously strengthened. As mentioned in the opening note, when he was running for president, Clinton was asked what he would use to pay off the huge national debt, and his answer was to strengthen the collection of inheritance tax and gift tax in the next 10 years.

(2) There is a tendency for taxation standards to increase. According to the latest law of immigration to the United States in 2002, the lifetime tax exemption for U.S. citizens will increase to $ 1,000,000 by 2006.