Lior Pick Adv. (CPA) and Shiri Weiss, Adv.
One of the issues on Moshe Kachlon’s agenda, Israel’s next minister of finance, is the institution of an estate tax.
In one of the interviews Kachlon gave during his political campaign, he said that he is in favor of instituting an estate tax on estates exceeding ten million shekels at the rate of between 20 to 25 percent.
As of today we do not know if and when such a tax will be imposed and at what rate, but it seems like the time has come to seriously examine the possibility of preparing for the arrival of an estate tax and to quickly perform legitimate legal procedures that would save hundreds of thousands and sometimes millions of shekels.
Many countries have already adopted the estate tax (for example, France has a 45% tax rate on estates, the US 40% as well as England).
Israel had an estate tax up to the year 1981, but the tax was revoked. It seems like it is about to make a comeback. It is accepted to assume that when an inheritance tax is imposed, a gift tax accompanies it so as to prevent transfer of assets to family members in the scope of tax planning.
It is advised to prepare for this new taxation and to try to transfer assets to successors, in order to prevent application of such taxation upon the passing of the endower.
It should be noted that the tax usually applies to the entire array of assets which belonged to the deceased, including real estate, securities, cash, insurance money and personal belongings (including jewelry, art pieces, etc.).
It should be emphasized that assets transferred in the framework of a will/ inheritance, are usually assets that the endower has adequately paid taxes on behalf of during his entire life.
Moreover, and as the Israeli tax authorities and the Israeli legislator have done in other cases, the tax will be effective beginning the official publication of the such legislation in the proposals listings, even if the final approval of the law takes a long time.
It is strongly advised to hurry, seek advice and utilize the mechanisms that the law permits as of today in order to try to save tax; particularly on account of the fact that the last time an inheritance tax was imposed in 1949, it was imposed retroactively several months back.
Our firm specializes in tax consultation for individuals and families with many assets and in finding legitimate tax planning schemes for the transfer of assets from one generation to the next.
The aforementioned should not be perceived as a recommendation and/or expression of opinion. In all instances we recommend receiving professional individual advice in accordance with the concrete circumstances of each and every event.
We would be happy to be at your disposal for any queries and or explanations regarding this matter or in general.
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