Finance Guide

Inheritance tax is a tax levied on the assets inherited by one person from another following the death of the original owner. Normally, it only applies when assets inherited are fairly substantial in value so that most people will never have to worry about inheritance tax. In cases where assets other than money are being inherited, those assets will have to be valued so that they can properly be taxed. Sometimes, in inheritance tax settlements, the government is willing to accept assets in lieu of cash. For example, it is not uncommon to hear of stately homes which gave up an Old Master painting to the care of the government to settle an inheritance tax bill.

When inheritance tax is applied, there is typically a certain amount that can be transferred without paying tax. Above that threshold value, the tax will be applied. There are usually cases where bequests are exempt from inheritance tax. For example, when assets are transferred to a spouse, no tax need be paid. Other exemptions may apply to charitable bequests. Dispositions of assets in the years preceding death can also be subject to inheritance tax so giving it all away before the end is not necessarily enough to escape the tax man’s clutches.

Tariffs are a form of tax levied on goods imported into the country. They may be charged at an absolute amount or as a percentage of the total price. Tariffs are one of the oldest forms of taxation, in use well before more modern forms of tax such as income or corporation tax. They were particularly popular with governments in the 17th and 18th centuries when the mercantilist doctrine was dominant in economic thought. Mercantilism held that money flowing out of the country was bad, and money flowing into the country was good. Naturally, according to this interpretation, importing goods was a bad thing, because it caused money to flow out of the country. Since tariffs make imported goods relatively more expensive to domestic consumers, they were widely favoured.

In modern times, the use of tariffs is quite rare. A web of international agreements has meant that trade between nations is far freer than it was before. When tariffs are imposed, it is almost never for the purpose of raising revenue per se, but because the tariff-imposing nation feels that the other country has acted unfairly in some way in its economic policies, perhaps, for example, by subsidising the industry which is producing the imported goods, meaning that it is not subject to normal economic restraints.

A sales tax is a tax levied on the purchases of good by consumers. Usually, it is levied at a single rate, rather than a graduated series of increasing rates, although different types of goods may be subject to different rates and some goods may be exempt entirely.

Sales taxes should be applied only to goods purchased by consumers, not by other businesses. For example, if a furniture-making company buys a quantity of lumber for use in manufacturing furniture, it should not have to pay any sales tax on the transaction.

A sales tax is very similar to a value added tax. The key difference is that a sales tax is charged only at the point of final sale of a product to the consumer while value added tax is charged at every stage of the business process when one business trades with another. The business may be entitled to a refund of what it pays other businesses in value added tax but the tax must be levied in the first place before the business applied for a refund to the government. For this reason, value added taxes tend to involve more record-keeping than sales taxes and to impose a significant bureaucratic burden.

In most developed countries, income tax is the primary means governments have of raising revenue for themselves. Since it is paid by almost everyone, it also tends to be the most politically sensitive tax and arguments about its appropriate level frequently feature in political debates.

In almost all cases, income tax is applied in a series of graduated bands, meaning that as a citizen’s income rises, his income above certain threshold values would be taxed at a gradually increasing rate. At very high incomes, it is even possible that the majority of any income gains a person benefits from will go to the government rather than to the income earner.

The existence of income tax necessitates an elaborate system of reporting and checking through which citizens declare their annual income to the government and those declarations are scrutinised to make sure that they are accurate. Penalties for untruthfulness or evasion of tax responsibilities include fines and imprisonment. In some cases, income tax responsibilities are handled by employers, who deduct the appropriate amounts from their employee’s wages before the employee receives them and forward this money to the government. In this context, it may not be necessary for the employee to file a personal tax return with the government because it will all be taken care of automatically.

Property Tax is a tax levied on the value of a property. In many developed countries, property taxes are levied by the local government and used to pay for the local government’s operating expenses while other major taxes, such as income tax, are levied by the central government.

This form of taxation usually requires a system of inspection whereby local government officials grade the property according to its presumed value, so that the property owner can then be charged at the appropriate rate.

Property taxes have been politically controversial for the simple reason that not everyone owns property. Since local governments are elected democratically and since the great bulk of local government expenditures are often financed by property taxes, it is therefore theoretically possible for a non-property owning majority to elect a government which would engage in lavish spending projects financed only by a minority. There is a potential for exploitation here which has been recognized by politicians of some countries, who have moved towards a local government household tax rather than a property tax per se.

Property taxes can also create tension when an area experiences dramatic rises in property values generally. In that case, households which may not be particularly wealthy, and who may have acquired a house when it was inexpensive, may find themselves being charged a very high rate for their home which is now worth much more. In extreme cases, households can find themselves driven out of their own home because of their inability to afford the higher property taxes.

The term tax avoidance is usually used to describe the practice of tax-payers using legitimate means to pay less of their money in tax than they would otherwise have to. It does not usually encompass behaviour which avoids the paying of taxes by means outwith the law, which is more often referred to as tax evasion.

Tax avoidance is extremely widespread, particularly among the wealthy. It is, of course, perfectly natural for tax-payers to wish to keep as much of their own money as possible and to seek out ways to do it. In most cases, tax avoidance will be facilitated by a professional accountant. Few ordinary tax-payers have the expert knowledge required to understand the intricacies of the tax system so well that they can make judgements about the best ways to avoid paying tax. Successful tax avoidance is usually accomplished through figuring out loopholes in the tax system and exploiting them so as to minimize the tax burden. The details of what can be done to avoid taxes naturally vary greatly from one country to another, since each country has its own separate tax system with unique features of its own.

Tax avoidance is not simply a personal thing but can also be performed by corporations.

A Value Added Tax is a form of sales tax. Its key distinguishing feature is that it is charged even on business to business transactions. However, businesses are usually entitled to refunds on value added tax which they have paid on products which could be regarded as inputs to their own business process. Typically, businesses keep careful records of all their transactions and apply for refunds to the government, if they are owed one, on a periodic basis, usually quarterly. If the company sells a large volume of products to consumers rather than businesses, it is possible that the company, on a net basis, will owe the government money rather than the other way around.

Value Added Tax is a major component of taxation in most European countries. In France, where the tax was first invented, it is, in fact, the principal means of raising revenue for the government.

Rates differ between countries but typically value added tax is charged at between 10-25% of the value of a sale. Governments often levy value added tax at a reduced rate on some goods and, in a few cases, goods may be exempt from it entirely.

Sometimes businesses quote product prices in which value added tax has already been factored in; sometimes the VAT amount is shown only when the sale is processed.

Taxes represent a transfer of wealth from the citizens of a country to the ruling power of that country. As such, they have existed since ancient times. The Bible speaks of them and it is clear from the biblical text that tax collectors were generally reviled. Almost anything can be taxed and there are various ways in which taxes can be applied.

The first taxes of which we have a documentary record were applied in ancient Egypt. In ancient times, it is clear that taxpayers were expected to offer up a portion of the agricultural produce they raised from the land to the ruling power of the day.

As economies have evolved, governments and rulers have chosen to raise taxes in different ways. For a long time, many countries raised revenue primarily through taxing imports into the country. In modern times, the income tax, which is charged as a percentage of all income earned in a period of time has become the most popular method by which governments in developed countries raise revenue. Corporation tax, a tax charged as a percentage of the profits made by incorporated companies, is also significant. Many countries also have sales taxes, or value added taxes, which are charged as a percentage of the selling price of a product or service.

Speeding fines are financial penalties imposed on drivers who exceed the speed limit in a given area. They can be imposed by police officers. Some police vehicles carry equipment which is able to estimate another vehicle’s speed. Police officers may also carry hand-held devices which serve a similar purpose.

In many areas, fines for speeding can now be imposed impersonally because of the existence of speed cameras. The speed cameras will detect the vehicle travelling at an impermissibly high speed, then take a snapshot photograph of the vehicle’s number plate as it passes the camera. The vehicle’s registration number will then be looked up and a fine notice sent to the registered vehicle owner’s address.

In some cases, the registered owner of the vehicle may be required to appear in court. If the vehicle owner wishes to dispute the fine a court appearance will be necessary. When speeding fines are imposed, the offence is usually noted on the driver’s licence. An accumulation of such notices can eventually lead to the removal of a driving licence. For this type of procedures you need to hire perfect attorney who can handle all your problems like the kanin law firm (http://www.kanninlaw.com), which is criminal defence and personal injury lawyer.

While the primary purpose of speeding fines is to regulate driving conduct on the roads, many drivers feel that the revenue raised provides an unhealthy incentive for cash-strapped local governments to be over-zealous in their enforcement of traffic regulations.