Inheritance Tax: The Risk of Non-Disclosure of Life Insurance Proceeds
Posted on: Aug 2nd, 2023
Category: Inheritant Tax
Inheritance tax is a subject that often raises many questions, particularly regarding the non-disclosure of life insurance proceeds. Some may believe that they can avoid the tax if they do not declare these proceeds. But is this the case? And more importantly, can this go unnoticed?
The Reality of Non-Disclosure
The truth is that non-disclosure is far from being a safe bet. Payment records are sent from insurance companies to the tax office by the 15th of the following month. Therefore, the tax office is already aware of these proceeds. In other words, non-disclosure is easily detectable.
The Risk of Investigation
Inheritance tax is one of the most likely to be investigated. In fact, out of 1,439,856 deceased individuals, 134,275, or 9.3% have declared their inheritance. Despite the decrease in declarations in the fiscal year 2021 to 6,317 cases due to the impact of COVID-19, the number of non-declarations detected was 5,532, accounting for 87.6% of all topics.
Understanding the risks associated with non-disclosure of life insurance proceeds for inheritance tax is crucial. The tax office has mechanisms to detect such non-disclosures, and the likelihood of being investigated is high. Therefore, declaring these proceeds to avoid potential legal issues is always advisable.