On July 9, 2013, the Pennsylvania Legislature passed House Bill 465, which includes a new subsection that exempts family owned business interests from inheritance tax. William D. Schroeder, Jr., our bankruptcy attorney in Philadelphia, has outlined some of the implications of this new law and how it can benefit you. Read the following article before investing in any legal services to ensure that you are up to date with the current laws surrounding inheritance tax in Pennsylvania.
House Bill 465
House Bill 465 modified section 72, which regards inheritance transfers not subject to tax; there is a new exemption for qualified family owned business interests. Prior to the introduction of this exemption, all family owned business interests were subject to different tax rates depending on various circumstances. With the introduction of this new change, the world of inheritance tax has changed greatly and our attorneys can help you take advantage of these changes.
What Does It Mean?
At one time, family businesses were liable to inheritance tax. For example, if a child received a family business from his parent that was worth $1,000,000, there would be a $45,000 tax on the transfer. Now, businesses that meet certain criteria are exempt from this tax. This allows you to keep the full value of your family business during the inheritance and probate process.
Criteria
In order to qualify for the new House Bill 465 exemption, your business must meet a number of different criteria. Some of the criteria include the following:
- Less than 50 full-time employees
- Less than $5,000,000 value
- Has been in operation for five years prior to the decedent’s death
For more information on the criteria visit the official Pennsylvania General Assembly website. If you are having trouble determining whether or not your family business meets the criteria for this exemption, our bankruptcy attorney in Philadelphia can aid you throughout the process and help you fully understand them.
If you or your family members are facing an inheritance tax on your family-owned business, consult a bankruptcy attorney in Philadelphia William D. Schroeder, Jr. who can help you determine if your business qualifies. The changes to House Bill 465 provide numerous benefits that can help you financially and ensure that you get all that you can out of your family business inheritance. Give us a call at (215) 822-2728 and we can guide you through the process and ensure that you have a full understanding of what is taking place.