History & SocietyScience & TechBiographiesAnimals & NatureGeography & TravelArts & CultureGames & QuizzesVideosOn This DayOne Good FactDictionaryCompanionsDemystifiedImage GalleriesInfographicsListsPodcastsSpotlightSummariesThe ForumTop Questions#WTFact100 WomenBritannica KidsSaving EarthSpace Next 50Student Center
Britannica Money
Subscribe Now
Table of Contents

gift tax

Also known as: capital transfer tax
Written and fact-checked byThe Editors of Encyclopaedia Britannica
The Editors of Encyclopaedia Britannica
Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They write new content and verify and edit content received from contributors.
Table of Contents

gift tax, a levy imposed on gratuitous transfers of property—i.e., those made without compensation. Provisions for such taxes are common in national tax systems.

In the tax systems of many nations, gift taxes are integrated to some degree with an estate (inheritance) tax. The relationship stems not only from the fact that gifts and bequests share the quality of gratuity but also from the practical consideration that gifts are often resorted to as a means of avoiding estate taxes. Where the two are more or less integrated, they may be thought of as constituting an accessions tax.

Gift taxes are typically of little significance in the generation of revenue. They serve a symbolic function in reminding the parties to a transfer of property that the state (or other municipality) creates the legal structure within which such transfers are possible. A more important function, and in some nations the explicit rationale for gift taxes, is to stem the use of gifts as a means of avoiding estate taxes.

Exemptions from the tax are commonly granted for gifts made to charitable, educational, or other qualifying institutions. Such exemptions are expressions of social policy.