2.1.2 Other types of taxes levied upon death

As mentioned above, death does not only trigger the levying of inheritance and estate taxes. It may also trigger other types of taxes, for example, mortis causa income or capital gains taxes. More specifically, there are states which levy mortis causa income taxes payable by the beneficiaries who receive “income from inheritance” that increases their ability-to-pay taxes. In other states, death results in a deemed disposition of the deceased’s property immediately before his death to his beneficiaries, with the deceased being the taxable person for whom his beneficiaries file his last income tax return. In some other states, a mortis causa capital gains tax is levied on the beneficiaries who are taxed on the accrued gain received upon the deceased’s death, with the acquisition price of the transferred property set at zero. Furthermore, some states levy territorial taxes, e.g. registration taxes and stamp duties on the mere transfer of immovable property located in their territory. Strictly speaking, however, those taxes are not death taxes but are levied on the mere transfer of the property located in their territory (irrespective of the event triggering such a transfer). Finally, there are states that levy taxes ancillary to the death taxes to counterbalance the deferral of a capital acquisition tax, which arises as a consequence of using several civil or common law arrangements such as trusts, usufruct, fideicommissum, and foundations.1