The Incidence of Estate Duty

This chapter examines the incidence of death duties, with particular reference to the estate duty of the United Kingdom. A substantial proportion of the not very extensive theoretical literature on economic aspects of death duties has been concerned to establish where the incidence of the duty lies—on the deceased or on the inheritor. The chapter looks first at those particular parts of the economic system where, because of the nature of the business organization, estate duty may be expected to have most effect. Methods of avoidance can be grouped under six heads: domicile abroad; gifts; trusts; investment in assets which carry reduced rates or are not aggregated with the estate; reduction in the estate duty value of assets; and generation skipping. Economic Significance of the Incidence of Estate Duty on Agriculture in so far as estate duty has accentuated the break up of large tenanted estates and the growth in owner-occupation.