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Denmark | Jim.
Inheritance and gift tax are equal here. From parents to children it is 15%. From a person to a nephew or niece it is just short of 40%. Parents can each give each of their children 58.000 DKK (roughly 10.000 USD) a year taxfree.
When passing on a farm to the next generation it can be done to the official value minus 15%. All real estate in DK is officially valued yearly. The value reflects the actual trading prices for real estate but is "one year behind".
Capital gains are complicated calculations taking offspring in the value at the time the old generation acquired the farm. These taxes can be high. We can roll over the latent estate tax burden to the next generation like you describe. The young generation this way carries on in the footsteps of the old, so to speak. This can be done by future generations too, so theoretically that tax never has to be paid. This latent tax consists mostly of depreciation of buildings and machinery and will only show up when or if these assets are sold at a higher than depreciated value.
The diff. between the price the estate can be passed on to and the loans, have to be financed. Either by the new generation paying in some way or by the old generation giving it as a gift and paying the 15% gift tax.
Our public spending is financed by high income taxes , 25% VAT on all goods and services, 180% registration tax on new cars and a so called poison tax on alcoholic beverages, tobacco, chocolate, cosmetics + duties on thousands of other things really.
Jorn
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Season for greedy American heirs.
