The "Trump inheritance bill" refers to the One Big Beautiful Bill Act (OBBBA), signed by President Trump in July 2025, which permanently raises the federal estate and gift tax exemption to $15 million per individual ($30 million for couples) starting January 1, 2026, indexing it for inflation, making permanent the high exemption levels from the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire. This major tax legislation provides significant estate tax relief for high-net-worth individuals and business owners, ensuring the historically high exemption amount continues indefinitely.
On July 3, 2025, the US House of Representatives passed President Trump's tax bill, dubbed the "One Big Beautiful Bill," extending Trump's 2017 tax cuts. The bill makes the estate tax permanent and increases the estate tax exemption to $15 million per person or $30 million for married couples.
Inheritance law in 2026 (specifically federal US law) involves a major shift as the estate and gift tax exemption is set to revert from its temporarily inflated 2025 level (around $14M) back to its pre-2018 inflation-adjusted level, potentially around $7 million per individual, creating a critical planning window in late 2025 to "lock in" the higher exemption using tools like SLATs (Spousal Lifetime Access Trusts). While state laws vary (some states have separate inheritance taxes), the main federal change means significantly lower thresholds for tax-free wealth transfer starting in 2026, making proactive estate planning crucial for high-net-worth individuals to avoid substantial taxes.
Timeline Rules
Key Changes for 2026
Lifetime Estate and Gift Tax Exemption: The law sets the federal exemption at $15 million for an individual, or $30 million for a married couple. This is the amount a person can transfer during their lifetime or at death without incurring federal estate or gift tax.
When a loved one passes, the last thing on most people's minds is taxes, but they do play an important role in settling the estate. In Canada, there is no inheritance tax. You don't have to pay taxes on money you inherit, and you don't have to report it as income.
You can typically inherit a very large amount from your parents without paying federal tax, as the federal estate tax exemption is around $15 million per person for 2026, meaning only estates larger than that pay tax, not you directly. While you generally don't pay income tax on inheritances (except for pre-tax retirement funds like IRAs/401(k)s, which are taxed as income when withdrawn), some states have their own estate or inheritance taxes with much lower thresholds, affecting a smaller portion of wealth.
Children generally inherit significant amounts tax-free due to the high federal estate tax exemption, which is $13.99 million per individual for 2025, with a planned reversion to a lower amount ($5 million adjusted for inflation) in 2026, meaning very large estates are taxed, but most inheritances fall below this threshold, though some states have their own inheritance taxes. Heirs also benefit from the "step-up in basis," which lowers capital gains tax on inherited assets like stocks and real estate.
The "7-year inheritance rule" (primarily a UK concept) means gifts you give away become exempt from Inheritance Tax (IHT) if you live for seven years or more after making the gift; if you die within that time, the gift may be taxed, often with a reduced rate (taper relief) applied if you die between years 3 and 7, but at the full 40% if you die within 3 years, helping people reduce their estate's taxable value by giving assets away earlier.
If let's say you are to inherit property from your parents. An inheritance tax will be imposed on this said property if it ever happens. In all honesty, there is nothing to be gained from that inheritance tax, not even a single economic gain.
Yes, in 2024, each parent could gift $18,000 to a child (totaling $36,000 per child for the couple) without tax implications, and for 2025, that amount increased to $19,000 per parent ($38,000 per child) because the annual gift tax exclusion is adjusted for inflation, requiring separate checks for each parent to utilize the full amount, according to TurboTax, Yahoo Finance, Guardian Life, IRS (.gov), and Mercer Advisors.
For 2025, the U.S. federal estate and gift tax exemption is $13.99 million per person, allowing individuals to transfer this amount tax-free, with the annual gift tax exclusion at $19,000 per recipient, but these generous amounts are set to expire at the end of 2025, reverting to roughly half that amount in 2026 unless Congress acts, with some recent legislation potentially extending this high exemption.
Canada doesn't have an estate or inheritance tax. What we do have is a tax-deferred system where RRSPs and RRIFs eventually become taxable income, and where secondary properties trigger capital gains. These are known quantities that can be planned for years in advance.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
The One Big Beautiful Bill Act (OBBBA) or the Big Beautiful Bill (P.L. 119-21), is a U.S. federal statute passed by the 119th United States Congress containing tax and spending policies that form the core of President Donald Trump's second-term agenda. The bill was signed into law by Trump on July 4, 2025.
He received gifts, loans, and inheritance from his father, Fred Trump, who was a real-estate developer and businessman. Donald Trump's primary business has been real estate ventures, including hotels, casinos, and golf courses. He also made money from Trump-branded products including neckties, steaks, and urine tests.
Yes, you can likely give your daughter $50,000 tax-free by using your annual gift exclusion and lifetime exemption, but you'll need to file Form 709 with the IRS to report the gift exceeding the annual limit ($19,000 in 2024/2025). The $50,000 gift reduces your large lifetime exemption (over $13 million in 2024/2025), meaning you won't pay tax on it unless your total lifetime gifts exceed that huge amount; your daughter never pays gift tax on the money.
If property or assets are transferred to the spouse or common-law partner. Property transferred to a surviving spouse or common-law partner who is a resident of Canada at the time of the death (or a certain trust) may not result in a capital gain or capital loss in the Final Return.
It's important to note that this annual exemption is your total allowance for a given tax year, which means you could give all £3,000 to one child, or split it between several children.. Note that this is a per person allowance, so both parents may gift £3,000 each per year tax-free.
The simplest way of avoiding Inheritance Tax is via the spouse or civil partner exemption rule. This covers couples who are either legally married or in a civil partnership. It also covers partners who are separated, but not those who are divorced (or had their civil partnership dissolved) at the time of death.
Inheriting $100,000 or more is often considered sizable. This sum of money is significant, and it's essential to manage it wisely to meet your financial goals. A wealth manager or financial advisor can help you navigate how to approach this.
You can gift your children as much money as you'd like, but you need to keep in mind that your gift may not be tax-free depending on the amount and circumstances.