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Inheritance tax, also known as estate duty or death duty, which arises on the death of an individual and is generally levied on the net assets of the dead person. Different countries have different laws in this regard, and it is advisable to plan suitably before hand to reduce the incidence of this tax.

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Inheritance tax is levied by the State on the beneficiary of an inheritance as opposed to the estate tax which is levied on the estate of the deceased by the federal government. Traditionally, many states did not have an inheritance tax as they received a portion of the estate tax collected by the federal government. But the feds no longer share the estate tax with the states and more states have enacted an inheritance tax.

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