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Estate transfer and Tax implications

Estates can be subject to tax if transferred while alive or after death. While you are alive, you can control and manage the tax issue, but after death, it is almost impossible, and in most cases, it would become incumbent upon beneficiaries to pay taxes on estates. Under Islami law, fractions of shares shall be owned by one or more Muslim inheritors, posing a potential tax issue upon death in some countries. Depending on your residence and domicile status in the country or jurisdiction, different taxes can be imposed on your estates, such as death tax, estate tax, wealth tax, probate tax, inheritance tax, succession tax, gift tax, or capital gain tax on any outstanding income. These taxes are legal liabilities and must be paid within such a time frame (typically six months to a year after the death of the Testator/Grantor) without exception. Any delays in paying taxes may be subject to fines and interest. Tax impact needs to be mitigated; otherwise, your inheritors may suffer from imposed tax. Not all countries have the same rules for taxation upon death. There are a few ways you can tackle this, with some limitations. We will break down the strategy in different steps to help you understand and eliminate the tax implications fully or partially.

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