Gif Tax, Avoidance of

What is Gift Tax, Avoidance of .?

  In economic theory, gift tax is a tax which is paid on property or money that is inherited from one living person to another. One can reduce the probability of paying this tax each year on a maximum value of 30,000 beyond which the tax will be applicable.
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However, gifts (goods or property) made under the provision of a Will, shall remain exempted from this tax. Different countries have different laws made under the provision of gift tax application. The value attached to it varies accordingly.

In order to avoid paying this tax, the “gift” must be valued at a price lower than the market rate; further, the gift has to be involuntary and gratuitous, which means that you do not have any ownership of the particular gift item and you must give it for free without any preconceived conditions. Conclusively, the gift given must be tangible in nature; giving a service does not fall under any gift tax regulation.

Edited and Updated 15th February 2014

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