DRS: SN 95(18), 1995 Legislative Changes Affecting the Succession and Transfer Taxes and the Estate Tax

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

This Special Notice has been cited by IP 99(3);
modified and superseded by SN 2001(10)

SN 95(18)

1995 Legislative Changes Affecting the Succession and Transfer Taxes and the Estate Tax


PURPOSE: The purpose of this Special Notice is to describe legislative changes made to the succession and transfer taxes and the estate tax during the 1995 Session of the Connecticut General Assembly.


STATUTORY AUTHORITY: Conn. Gen. Stat. 12-344, as amended by 1995 Conn. Pub. Acts 256, 1; Conn. Gen. Stat. 12-359, as amended by 1995 Conn. Pub. Acts 298, 2; Conn. Gen. Stat. 12-376, as amended by 1995 Conn. Pub. Acts 26, 14; Conn. Gen. Stat. 12-376a, as amended by 1995 Conn. Pub. Acts 26, 15; Conn. Gen. Stat. 12-376b, as amended by 1995 Conn. Pub. Acts 26, 16; Conn. Gen. Stat. 12-382, as amended by 1995 Conn. Pub. Acts 298, 1; and Conn. Gen. Stat. 12-392, as amended by 1995 Conn. Pub. Acts 26, 17.


EFFECTIVE DATES: The provisions of 1995 Conn. Pub. Acts 26, 14, 15, 16 and 17 take effect July 1, 1995 and are applicable to taxes due and owing on or after July 1, 1995, whether or not those taxes first became due before said date. The provisions of 1995 Conn. Pub. Acts 298 are effective July 6, 1995 and are applicable to estates of persons dying on or after July 1, 1995. The provisions of 1995 Conn. Pub. Acts 256 are effective July 6, 1995 and are applicable as described below.


CHANGES IN INTEREST RATE: Interest shall accrue on succession and transfer taxes and estate tax that are due and payable on or after July 1, 1995 at the rate of 1% per month or fraction thereof (rather than at the rate of 15% per annum). Interest shall accrue on succession and transfer taxes that are due and payable on or after July 1, 1995 on transfers that could not have been known, or in good faith were not known, at the time of death of the transferor, or at the time any other estate of such transferor was probated, at the rate of 3/4% per month or fraction thereof (rather than at the rate of 11 1/4% per annum), upon the waiver by the Commissioner of interest at the 1% rate. Interest shall accrue on succession and transfer taxes that are payable in installments under Conn. Gen. Stat. 12-376b, and which installments are due and payable on or after July 1, 1995 at the rate of 1% per month or fraction thereof (rather than at the underpayment rate on federal income tax). Interest shall accrue on an overpayment, other than any overpayment in relation to a computation of tax in accordance with Conn. Gen. Stat. 12-355(b), at the rate of 2/3% per month or fraction thereof (rather than at the rate of 9% per annum).


TRANSFERORS DYING BEFORE JANUARY 1, 1995: In the event that the succession tax is due and payable, but has not been paid in full, before July 1, 1995, then, in July 1995, interest shall accrue at the former rate until the day of the month that corresponds to the date of the decedent's death, and shall accrue at the new rate commencing the next day. For example, if the transferor died on December 8, 1994, and the succession and transfer taxes were not paid in full before July 1, 1995, interest shall accrue at the rate of 15% per annum until July 8, 1995, and at the rate of 1% per month or fraction thereof from July 9, 1995 on.


CONSENT TO TRANSFER REQUIREMENTS FOR SURVIVING SPOUSE ELIMINATED: Any person may transfer, pay or deliver a decedent's property to the decedent's surviving spouse without the Commissioner's written consent. Conn. Gen. Stat. 12-382(d), as added by 1995 Conn. Pub. Acts 298, 1.


ACKNOWLEDGMENT REQUIREMENT FOR RETURNS AND AMENDMENTS DELETED: The Commissioner will no longer acknowledge, to the probate court and to the fiduciary or transferee, the receipt from the probate court of succession tax returns and amendments thereto. Conn. Gen. Stat. 12-359(a), as amended by 1995 Conn. Pub. Acts 298, 2.


PHASE OUT OF SUCCESSION TAX: The succession tax will be reduced , in increments, and will ultimately be repealed. Conn. Gen. Stat. 12-344, as amended by 1995 Conn. Pub. Acts 256, 1.

With respect to the net taxable estate passing to any Class A beneficiary, the reduction commences for estates of decedents dying during 1997. If the death of the decedent occurs after 2000, the net taxable estate passing to a Class A beneficiary is not taxable. A person is a Class A beneficiary of the decedent if he or she is the decedent's parent; grandparent; adoptive parent; and a natural or adopted descendant of the decedent, such as a daughter, son, grandchild or great-grandchild.

With respect to the net taxable estate passing to any Class B beneficiary, the reduction commences for estates of decedents dying during 1999. If the death of the decedent occurs after 2002, the net taxable estate passing to a Class B beneficiary is not taxable. A person is a Class B beneficiary of the decedent if he or she is the decedent's brother or sister (full or half); a natural or adopted descendant of such brother or sister (niece or nephew related by blood); stepchild; or the spouse or unremarried widow(er) of the descendent's natural or adopted child.

With respect to the net taxable estate passing to any Class C beneficiary, the reduction commences for estates of decedents dying during 2001. If the death of the decedent occurs after 2004, the net taxable estate passing to a Class C beneficiary is not taxable. A person is a Class C beneficiary of the decedent if he or she is not a Class AA beneficiary, a Class A beneficiary, or a Class B beneficiary. For example, a Class C beneficiary may include the decedent's cousin, uncle, aunt, sister-in-law, brother-in-law, stepbrother, stepsister, or step-grandchild, as well as unrelated individuals and associations or corporations.

The tables that follow take into account the effective rate of tax, including the surtax under Conn. Gen. Stat. 12-344a(a), and the surtax on the sum of the tax and the surtax under Conn. Gen. Stat. 12-344a(b), applicable to the net taxable estate of a decedent who dies during 1997, 1998, 1999, 2000, 2001, 2002, 2003 or 2004 passing to a Class A beneficiary, a Class B beneficiary or a Class C beneficiary. The tables do not cover the net taxable estate passing to a Class AA beneficiary or any transfer to any charitable, literary, scientific, historical, religious to government-related organization. For estates of decedents dying on or after July 1, 1988, the net taxable estate passing to a Class AA beneficiary is not taxable. See 1986 Conn. Pub. Acts 397, 6, adding subsection (b) to Conn. Gen. Stat. 12-344. (A person is a Class AA beneficiary of the decedent if he or she is the decedent's spouse.) Transfers from an estate of a decedent to any charitable, literary, scientific, historical, religious or government-related organization are exempt from succession tax. Conn. Gen. Stat. 12-347(a).


INDEX OF TAX TABLES FOR ESTATE OF
DECEDENTS DYING DURING

1997 | 19981999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 1997

CLASS A. (Total Exemption for class ($250,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class A is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$250,000

$0

-----

-----

250,000

400,000

0

7.15%

$250,000

400,000

600,000

10,725

8.58%

400,000

600,000

1,000,000

27,885

10.01%

600,000

over $1,000,000

-----

67,925

11.44%

1,000,000

CLASS B. (Total Exemption for class ($6,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class B is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$6,000

$0

-----

-----

6,000

25,000

0

5.72%

$6,000

25,000

150,000

1,086.80

7.15%

25,000

150,000

250,000

10,024.30

8.58%

150,000

250,000

400,000

18,604.30

10.01%

250,000

400,000

600,000

33,619.30

11.44%

400,000

600,000

1,000,000

56,499.30

12.87%

600,000

over 1,000,000

-----

107,979.30

14.30%

1,000,000

CLASS C. (Total Exemption for class ($1,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$1,000

$0

-----

-----

1,000

25,000

0

11.44%

$1,000

25,000

150,000

2,745.60

12.87%

25,000

150,000

250,000

18,833.10

14.30%

150,000

250,000

400,000

33,133.10

15.73%

250,000

400,000

600,000

56,728.10

17.16%

400,000

600,000

1,000,000

91,048.10

18.59%

600,000

over 1,000,000

-----

165,408.10

20.02%

1,000,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 1998

CLASS A. (Total Exemption for class ($500,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class A is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$500,000

$0

-----

-----

500,000

600,000

0

8.58%

$500,000

600,000

1,000,000

8,580

10.01%

600,000

over 1,000,000

-----

48,620

11.44%

1,000,000

CLASS B. (Total Exemption for class ($6,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class B is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$6,000

$0

-----

-----

6,000

25,000

0

5.72%

$6,000

25,000

150,000

1,086.80

7.15%

25,000

150,000

250,000

10,024.30

8.58%

150,000

250,000

400,000

18,604.30

10.01%

250,000

400,000

600,000

33,619.30

11.44%

400,000

600,000

1,000,000

56,499.30

12.87%

600,000

over 1,000,000

-----

107,979.30

14.30%

1,000,000

CLASS C. (Total Exemption for class ($1,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$1,000

$0

-----

-----

1,000

25,000

0

11.44%

$1,000

25,000

150,000

2,745.60

12.87%

25,000

150,000

250,000

18,833.10

14.30%

150,000

250,000

400,000

33,133.10

15.73%

250,000

400,000

600,000

56,728.10

17.16%

400,000

600,000

1,000,000

91,048.10

18.59%

600,000

over 1,000,000

-----

165,408.10

20.02%

1,000,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 1999

CLASS A. (Total Exemption for class ($800,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class A is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$800,000

$0

-----

-----

800,000

1,000,000

0

10.01%

$800,000

over 1,000,000

-----

20,020

11.44%

1,000,000

CLASS B. (Total Exemption for class ($200,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class B is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$200,000

$0

-----

-----

200,000

250,000

0

8.58%

$200,000

250,000

400,000

4,290

10.01%

250,000

400,000

600,000

19,305

11.44%

400,000

600,000

1,000,000

42,185

12.87%

600,000

over 1,000,000

-----

93,665

14.30%

1,000,000

CLASS C. (Total Exemption for class ($1,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$1,000

$0

-----

-----

1,000

25,000

0

11.44%

$1,000

25,000

150,000

2,745.60

12.87%

25,000

150,000

250,000

18,833.10

14.30%

150,000

250,000

400,000

33,133.10

15.73%

250,000

400,000

600,000

56,728.10

17.16%

400,000

600,000

1,000,000

91,048.10

18.59%

600,000

over 1,000,000

-----

165,408.10

20.02%

1,000,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 2000

CLASS A. (Total Exemption for class ($2,000,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class A is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$2,000,000

$0

-----

-----

over 2,000,000

-----

0

11.44%

2,000,000

CLASS B. (Total Exemption for class ($400,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class B is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$400,000

$0

-----

-----

400,000

600,000

0

11.44%

$400,000

600,000

1,000,000

22,880

12.87%

600,000

over 1,000,000

-----

74,360

14.30%

1,000,000

CLASS C. (Total Exemption for class ($1,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$1,000

$0

-----

-----

1,000

25,000

0

11.44%

$1,000

25,000

150,000

2,745.60

12.87%

25,000

150,000

250,000

18,833.10

14.30%

150,000

250,000

400,000

33,133.10

15.73%

250,000

400,000

600,000

56,728.10

17.16%

400,000

600,000

1,000,000

91,048.10

18.59%

600,000

over 1,000,000

-----

165,408.10

20.02%

1,000,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 2001

CLASS A. Exempt
CLASS B. (Total Exemption for class ($600,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class B is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$600,000

$0

-----

-----

600,000

1,000,000

0

12.87%

$600,000

over 1,000,000

-----

51,480

14.30%

1,000,000

CLASS C. (Total Exemption for class ($200,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$200,000

$0

-----

-----

200,000

250,000

0

14.30%

$200,000

250,000

400,000

7,150

15.73%

250,000

400,000

600,000

30,745

17.16%

400,000

600,000

1,000,000

65,065

18.59%

600,000

over 1,000,000

-----

139,425

20.02%

1,000,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 2002

CLASS A. Exempt
CLASS B. (Total Exemption for class ($1,500,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class B is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$1,500,000

$0

-----

-----

over 1,500,000

-----

0

11.44%

1,500,000

CLASS C. (Total Exemption for class ($400,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$400,000

$0

-----

-----

400,000

600,000

0

17.16%

$400,000

600,000

1,000,000

34,320

18.59%

600,000

over 1,000,000

-----

108,680

20.02%

1,000,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 2003

CLASS A. Exempt
CLASS B. Exempt
CLASS C. (Total Exemption for class ($600,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$600,000

$0

-----

-----

600,000

1,000,000

0

18.59%

600,000

over 1,000,000

-----

74,360

20.02%

1,000,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 2004

CLASS A. Exempt
CLASS B. Exempt
CLASS C. (Total Exemption for class ($1,500,000) is included in Table)

If NET TAXABLE AMOUNT passing to
Class C is at least:

but is less than or equal to:

the tax is the sum of:

plus the following %:

of the amount exceeding:

$0

$1,500,000

$0

-----

-----

over 1,500,000

-----

0

20.02%

1,500,000


TAX TABLES FOR ESTATES OF DECEDENTS DYING DURING 2005

CLASS A. Exempt
CLASS B. Exempt
CLASS C. Exempt

EFFECT ON OTHER DOCUMENTS: None affected.


EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in State or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners


PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.

FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.

Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.


SN 95(18)
Succession and transfer tax
Estate Tax
Issued: 10/20/95