Financial Responsibility

Question 1 • Personal Finance - EL3403

What is the purpose of the inheritance tax?

Answer

To provide financial support to the government upon the death of the owner of the assets.

To discourage the transfer of wealth from one generation to another upon the death of the owner of the assets

To tax the transfer of wealth from one generation to another upon the death of the owner of the assets.

To encourage the transfer of wealth from one generation to another upon the death of the owner of the assets.

Explanation

An inheritance tax is imposed on wealth transferred to beneficiaries when the owner of the assets dies. Its purpose is to tax that transfer, so the correct choice is “To tax the transfer of wealth from one generation to another upon the death of the owner of the assets.”

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