How can I avoid tax on the future inheritance I will get from my parents?
Question:
I have recently been asked by my parents who are revising their wills, if the money I inherit from them would be taxable in Israel. Can you update me in this regard?
Sent (September 1, 2007)
Answer:
By: ACL
Dear Concerned,
In terms of Israeli tax law, inheritances and proceeds from life insurance policies received by Israeli residents are not taxed. However the future income earned on these funds would be taxable.
There are certain strategies, which could be incorporated within the wills which are drafted by ones parents, which could result in this income not being caught in the Israeli tax net. Your parents would be advised to get professional input in this regard. However, my experience is that the professional advisors overseas do not fully understand Israeli tax law, which is constantly changing, so they would need Israeli based professionals helping them, in addition to their own advisory team.