The Ministry of Finance is, under the Cabinet's instruction, considering raising the tax-exempt threshold for inheritance tax to NT$10 million (US$300,850) from the current NT$7.79 million. In addition, the ministry could allow taxpayers to give family members tax-exempt gifts by deducting the amount from the tax-exempt inheritance allowance, as if passing on an inheritance before one's death.
The ministry said it planned to submit the draft amendment to the Estate and Gift Tax Act (
The amendment will also include proposals to decrease the inheritance and gift tax rates. The ministry did not report the ranges of such rate cuts to the Cabinet on Thursday.
If the bill passes three readings in the next legislative session, the new rules are expected to take effect next year at the earliest, the ministry said.
Tax-exempt inheritance only applies in true cases of inheritance in the law as it stands. Gifts, on the other hand, are tax-free if they do not exceed NT$1.11 million per year.
The ministry has proposed establishing a lifelong wealth-transfer system to allow a person to apply the inheritance tax deductible to gifts to relatives while alive.
The model, used in the US, has been proposed by Minister of Finance Ho Chih-chin (
As an example, under the current law, if a father gives a house worth NT$6 million to his daughter, he would be levied a gift tax as the amount exceeds the exemption value of NT$1.11 million.
The amendment would allow the father to deduct NT$4.89 million from the inheritance tax deductible.
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