What is Generation-skipping transfer tax?
In short
The generation-skipping transfer tax is a separate flat tax, at the top estate tax rate, on transfers to people two or more generations below the transferor (skip persons), such as grandchildren, beyond an exemption equal to the basic exclusion amount.
Key takeaways
- It applies in addition to any gift or estate tax.
- If a grandchild's parent has died, the grandchild generally isn't treated as a skip person.
- Its exemption is not portable between spouses.
Where it's tested
TCP: Estate & Gift Tax Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which transfer may be subject to the generation-skipping transfer tax?