A recent report published by a firm of accountants has found that Ireland and the UK levy the highest rates of inheritance or estate tax of any major world economies.
The report computes that Ireland takes on average 26 percent from the estate of a deceased individual with assets worth USD3m. The UK on the other hand would on average take an even higher percentage, amounting to around 25.8 percent. These figures are a long way in excess of the global average of these taxes which is 7.67 percent, with China, India and Russia imposing no tax at all on estates. The average inheritance tax in the EU is only 14 percent.
An example of how the tax operates is that the UK charges inheritance tax at a rate of 40% but this applies to estates worth more than GBP 325,000. Many estates are therefore taken out of tax altogether by this nil rate band while others pay inheritance tax at 40% on only a small part of the estate. According to the recent report, therefore, a typical percentage charged is around 25.8 percent.
