We’ve been back to America for two years now. Had another kid, bought a house and just started to settle down and we get the dreaded call from Taiwan. My wife’s father is in a coma and isn’t expected to survive.
My wife is returning to Taiwan with the baby as soon as we get her a passport.
Her parents were not rich but they acquired a few rental properties over the years. The properties were in her father’s name and here lies my question.
Will my wife’s mother have to pay inheritance tax on the property once her husband dies if the property is not in her name (so far everyone says yes and it could be as high as 40%)
Is there a way to transfer ownership of the property without such a high tax.
What about unscrupulous funeral directors? I heard that they often pressure the widow to have elaborate and very expensive funerals. Has anyone experienced this?
I can’t believe they would tax a widow 40% of her assets after her husband dies. I was told there is a way to put her name on the deed but her husband is in a coma and is unable to sign anything.
So I take it that the first 14 million would be exempt from taxes and the rest would be at 40% or so.
It doesn’t seem right that a spouse should pay inheritence tax.
First your husband of 40 years dies and then you lose 40% of your assets
So I take it that the first 14 million would be exempt from taxes and the rest would be at 40% or so.
It doesn’t seem right that a spouse should pay inheritence tax.
First your husband of 40 years dies and then you lose 40% of your assets[/quote]
Yip. That and no history of primogeniture explain why riches are often squandered with 3 generations.
In addition to taxes, be sure to research as quickly as possible ALL of the father’s debts, because in Taiwan unlike the US, debts attach to the decedent’s estate. What that means is if the decedent had NT$10M in assets and NT$20M in debts, but you didn’t know that and you make a formal claim for the purpose of collecting the assets, you will instead be shocked to discover that you’re not inheriting assets, you’re inheriting debt. By making a formal claim in that case you will have elected to make yourself legally and irrevocably bound to pay off those debts, whether you knew of them or not.
I believe you should probably hire not just a good, trustworthy Taiwan lawyer (based on the recommendation of someone you trust), but a Taiwan investigator to perform a comprehensive search for the decedents assets AND debts.
In addition to taxes, be sure to research as quickly as possible ALL of the father’s debts, because in Taiwan unlike the US, debts attach to the decedent’s estate. What that means is if the decedent had NT$10M in assets and NT$20M in debts, but you didn’t know that and you make a formal claim for the purpose of collecting the assets, you will instead be shocked to discover that you’re not inheriting assets, you’re inheriting debt. By making a formal claim in that case you will have elected to make yourself legally and irrevocably bound to pay off those debts, whether you knew of them or not.
I believe you should probably hire not just a good, trustworthy Taiwan lawyer (based on the recommendation of someone you trust), but a Taiwan investigator to perform a comprehensive search for the decedents assets AND debts.[/quote]
Wasn’t that law recently repealed? I’m not at ALL sure, but I seem to remember editing a report to that effect a few weeks ago.
Most of the property is in a building owned by many different people in an extended family. They can’t really sell it outside of the family and no one inside the family is interested in buying. It has a high value but a low residual income. The apartment might be worth 6 million but the rent is only about 12,000 a month. They might have to pay 2.4 million in taxes for each apartment they own. It would take about 2000 months of rent to pay off the taxes.
Aside for the financial problems, he was a great guy who was the center of the family. I remember the first thing he ever said to me.
I was in my wife’s room and he walked in all smiles and asked in Chinese “Does he speak Chinese?”
“No” my wife replied.
Then he said “Get that Foreigner out of here before your mother gets home"
He smiled at me and walked out the door.
I thought I really hit it off with him.
I don’t have all the details about what happened but from what I understand he went to a clinic when he should have went to the hospital. A simple blood test would have shown the problem and his chance of survival would have been in the high 90%. A week later without proper medical care his chance of survival was put at less than 10%.
That’s the 3rd person I know who died by going to a small clinic when they should have gone to a hospital. Clinics are good for sniffles and boo boo’s but I don’t remember them ever doing lab work.
The tax laws on inheritance are high, but there are a lot of different deductions and loopholes you can use to advantage. A good dai su will be able to take care of that and minimize the tax payable.
The way most Taiwanese avoid this is to have a person distribute their property before they are incapacitated. Obviously, no help in the case of an accident or something sudden, like your father-in-law.
And, yes, the funeral directors are insensitive vultures…they will try to milk you for everything they can.
Do you know if he has insurance? That would definitely ease your mother-in-law’s worries…