Foreword  

Nature and Scope of Inheritance Tax

The inheritance tax is not a tax upon property, but is essentially a succession tax, or tax upon the right or privilege of receiving or succeeding to property. It reaches not only the right to succeed to property under a will or the laws of succession, but also any right in property received through the medium of a transfer made without a valuable and adequate consideration in money or money's worth during the lifetime of the transferor, either in contemplation of his death or with the intention that it take effect in possession or enjoyment at or after his death. In addition, it reaches the receipt of homestead property, a family allowance, property set apart by order of a probate court, a power of appointment, and proceeds of a life or accident insurance policy on the life of a decedent. It also extends to the right of a surviving joint tenant to the immediate ownership, possession, and enjoyment of joint tenancy property.

Unlike the federal estate tax, which is a tax on the right of a decedent to transmit property and is measured by the size of the decedent's net estate, the inheritance tax is measured by the share of a decedent's net estate passing to each particular beneficiary, the rates imposed varying according to the amount received or succeeded to by the beneficiary and his relationship to the decedent.

Additional Tax

In addition to the inheritance tax, the Inheritance Tax Law imposes an additional or so-called “pick-up” tax which is applicable whenever a credit for state inheritance tax is allowed by the federal government under the federal estate tax law and either no inheritance tax is payable to this State or the amount thereof is less than the full amount of the credit allowable under the federal law.

History of Inheritance Tax Legislation

The Legislature of the State of California has enacted seven major inheritance tax laws, which together constitute single and continuous legislation. The following is a summary history of the major provisions of these laws:

This imposed a tax of $5 on each $100 of the market value of property transferred by a decedent to persons other than the decedent's direct relatives (a father, mother, husband, wife, lawful issue, any lineal descendant born in lawful wedlock, adopted child, brother, sister, the wife or widow of a son, and the husband of a daughter), and to organizations other than those exempt from taxation. Transfers taxable included (i) transfers by will or the laws of succession; (ii) transfers inter vivos made by deed, grant, sale, or gift either in contemplation of death or with the intention that they take effect in possession or enjoyment at or after death; and (iii) bequests or devises to executors and trustees in lieu of statutory commissions and allowances, to the extent of the excess over such commissions and allowances. Any estate valued at less than $500 was exempt.

The act was amended in 1895, 1897, 1899, and 1903 (twice).

The 1895 amendment (Chapter 28, Statutes of 1895; effective March 9, 1895) related to the appraisement of estates and the duties of certain officers in the collection of the tax.

The 1897 amendment (Chapter 83, Statutes of 1897; effective March 9, 1897) extended the transfer exemption to transfers to resident nieces and nephews, and to nonprofit charitable, educational, and public institutions.

The 1899 amendment (Chapter 85, Statutes of 1899; effective March 14, 1899) abolished the exemption of transfers to brothers and sisters and to resident nephews and nieces.

The first 1903 amendment (Chapter 52, Statutes of 1903; effective February 27, 1903) authorized county treasurers to employ attorneys.

The second 1903 amendment (Chapter 228, Statutes of 1903; effective March 20, 1903) extended the transfer exemption to any transfer to a person who for 10 years prior to a decedent's death had stood in the mutually acknowledged relation of a child to the decedent, and to any previously unincluded transfer to a lineal ancestor.

The act was expressly repealed in 1905 by Chapter 314 of the Statutes of 1905.

This imposed an inheritance tax on transfers to those in direct, as well as in collateral, relationship to the transferor or deceased. The tax imposed was in the nature of a “step” or “progressive” tax-a tax which takes into account both relationship and the amount transferred.

Taxable transfers under this act included not only those subject to the 1893 act, but also the exercise of a power of appointment, or the failure or omission to exercise such a power, by the person in whom the power was vested. The property to which the power related was deemed a part of he estate of the donee of the power.

As under the 1893 act, transfers to tax-exempt organizations and to nonprofit charitable, educational, and public institutions were exempt from the tax imposed. The act also granted specific exemptions varying from $500 in the case of a transfer to a stranger to $10,000 in the case of a transfer to a widow or minor child.

If the market value of property given to any person did not exceed $25,000, the act taxed the difference between the amount given and the applicable specific exemption at a so-called “primary rate,” varying from 1 percent in the case of a husband, wife, lineal issue, lineal ancestor, or adopted or mutually acknowledged child, to 5 percent in the case of a stranger. If the market value of the property was more than $25,000, the act taxed the difference between the applicable specific exemption and the first $25,000 at the “primary rate,” and taxed the excess at rates dependent upon the amount of the excess and the relationship between the transferee and the transferor.

In other respects the 1905 act was substantially the same as the 1893 act.

The 1905 act was expressly repealed in 1911 by Chapter 395 of the Statutes of 1911.

This, in the main, was substantially the same as the 1905 law.

Material differences appeared in the amounts of some of the specific exemptions and in the rates of taxation.

Other differences appeared in provisions for the taxation of homesteads, both statutory and probate, and for the appointment by the Controller of inheritance tax appraisers.

he act was expressly repealed in 1913 by Chapter 595 of the Statutes of 1913.

This re-enacted the substance of most of the provisions of the 1911 law.

An innovation was a provision for taxing the giving of a power of appointment as a transfer from the donor to the donee of the power, and taxing the transaction upon the donor's death as part of his estate. Under the former law the exercise or nonexercise of a power by the donee was deemed a transfer taxable in his estate.

The act differed materially from the 1911 act in the rates on transfers in excess of $100,000.

The act was amended twice at the 1915 Session of the Legislature: by Chapters 189 and 198 of the Statutes of 1915 (each effective August 8, 1915).

The first of these amendments changed the rate provisions, reduced the specific exemption for Class C transferees (uncle, aunt, descendant of uncle or aunt), and, for exemption and rate purposes, placed a grand uncle or grand aunt or descendant of either in the same category as a stranger in blood.

An innovation effected by the second amendment was a provision for taxing the creation of a joint tenancy as a transfer intended to take effect in possession or enjoyment at or after death.

The act was expressly repealed by Chapter 589 of the Statutes of 1917.

A major difference was contained in provisions exempting from the act the one-half of the community property passing to a wife under the law of succession upon the death of her husband, and one-half of any community property transferred inter vivos by a husband to his wife, or converted by him inter vivos into joint tenancy property between them.

The act provided for a return to the 1905 method of taxing powers of appointment: i.e., on the exercise or nonexercise of the power by the donee, and as though the property to which the power related were a part of his estate.

Instead of taxing the creation of a joint tenancy as a transfer intended to take effect in possession or enjoyment at or after death, as was the case under the 1913 law, as amended,the act taxed the right of a surviving joint tenant to the immediate ownership, possession, or enjoyment of so much of the tenancy property as belonged to the deceased joint tenant and never originally belonged to the survivor.

In connection with taxable transfers inter vivos, the act defined valuable and adequate consideration as consideration equal in money or money's worth to the full value of property transferred.

In a case of several transfers made by a decedent to one person, the act provided that the tax should be imposed upon the aggregate market value of the property transferred, in the same manner and to the same extent as if all the property had been included in one transfer.

The act specifically forbade any deduction for an inheritance or estate tax paid to the federal government.

The act provided that the charitable exemption should be confined to transfers to organizations organized or existing under the laws of California or to transfers of property limited for use in this State.

The tax rates and specific exemptions remained as they were under the 1913 act, as amended by Chapter 189 of the Statutes of 1915.

The act was expressly repealed by Chapter 821 of the Statutes of 1921.

This, in its original form, was substantially the same as the 1917 law.

One feature of the act was a provision for deductions in determining the taxable market value of property transferred. These included debts, funeral expenses, and expenses of last illness; state, county, and municipal taxes which were a lien against the decedent's property at the date of his death; ordinary expenses of administration; amounts due or paid to the federal government for federal inheritance or estate taxes; and amounts due or paid any state (other than California) as inheritance, succession, or transfer taxes.

Another feature was a provision for an exemption in respect to all property transferred to a Class A transferee (husband, wife, lineal ancestor, lineal issue, adopted child, acknowledged child, or lineal issue of adopted or acknowledged child), if within five years prior to the death of the decedent the property had been transferred to the decedent by another decedent to whom the present decedent was a Class A transferee, and a tax paid on such transfer. This was the inception of the previously taxed property exemption.

A third feature was a provision to the effect that in the computation of the tax, any property falling within any of the several specified exemptions should first be deducted from the aggregate amount of property transferred, and that the remainder should be taxed at the rates it would have been taxed had no such exemptions been allowed.

The specific exemptions were the same as under the 1917 law. The rates of tax were also the same except as to taxable values in excess of $200,000.

The act was amended in 1923, 1925 (twice), 1927, 1929, 1933, and 1935.

The 1923 amendment (Chapter 337, Statutes of 1923; effective August 17, 1923) amplified the community property exemptions mentioned in connection with the 1917 act, in providing that upon the death of a wife neither the one-half of the community belonging to a husband under the probate law, nor the other one-half which might pass to him under such law in the event of his wife's failure to dispose of it by will to others, was subject to the act.

The first 1925 amendment (Chapter 238, Statutes of 1925; effective July 23, 1925) merely provided for the deposit of taxes collected in the General Fund.

The second 1925 amendment (Chapter 284, Statutes of 1925; effective July 23, 1925) provided that when a husband by testamentary disposition of the community property forced his surviving wife to elect whether to take under his will or by operation of law, any of such property, not exceeding one-half of the value of the total community, which she might elect to take under the will was not subject to the act. It also provided that for the purposes of the act, any personal property, wherever situated, acquired by spouses before or after the amendment while domiciled elsewhere, which would not have been the separate property of either if acquired in California, should be deemed to be community property.

Another innovation effected by the second 1925 amendment was a provision extending the tax to family allowances.

The 1927 amendment (Chapter 646, Statutes f 1927; effective July 29, 1927) provided for an exemption as to intangibles of a nonresident decedent who, at the time of his death, was a resident of a state or territory of the United States which imposed a succession or death tax in respect to the intangibles of its own resident decedents, but either: (1) Did not impose such a tax in respect to intangibles of residents of California; or (2) Granted a reciprocal exemption in respect to intangibles. The amendment also inserted provisions for an additional or estate tax in cases where a federal estate tax was imposed, to insure in all events that the tax payable to the State should at least equal the 80 percent federal estate tax credit.

The 1929 amendment (Chapter 844, Statutes of 1929; effective August 14, 1929) provided that a taxable inter vivos transfer to take effect in possession or enjoyment at or after death of the transferor should be valued as of the date of death of the transferor. It eliminated as a taxable transfer any failure or omission by a donee to exercise a power of appointment previously given him. It provided that the proceeds of life or accident policies payable to the insured or his estate should be subject to the act, but excluded from the act the proceeds of all other life or accident policies. It also changed some of the specific exemptions and rates of tax.

The 1929 amendment, in addition, provided for a reciprocal exemption in the matter of transfers to foreign charitable organizations; exempted the proceeds of federal war risk insurance payable to the estate of a World War veteran; extended the reciprocal intangibles exemption to transfers of intangibles by nonresidents who resided in foreign states or countries; authorized the State Controller to compromise contingent taxes; provided that property within the previously taxed property exemption should be valued as of the date of death of the first decedent; and made numerous changes respecting the administration and collection machinery of the act.

The 1933 amendment (Chapter 1048, Statutes of 1933; effective October 25, 1933) changed the specific exemption and rates of tax applicable to transfers to a wife.

The 1935 amendment (Chapter 177, Statutes of 1935; approved May 20, 1935) made some changes in the refund provisions of the act, but never became effective in view of the enactment of the Inheritance Tax Act of 1935 (Chapter 358, Statutes of 1935), which repealed the 1921 act.

This act, as adopted, was substantially the same as the 1921 act, as amended.

In addition to listing the several taxable inter vivos transfers specified in the 1921 act, the act also set forth the pre-existing law that taxable inter vivos transfers include any transfer of property without a valuable and adequate consideration as to which the transferor reserved a life estate or life income or the transferee promised to make payments to or take care of the transferor, and include any transfer of property without a valuable and adequate consideration made by way of an advancement or effected by means of a revocable trust.

The act, in effect, exempted any transfer of intangible personal property by a nonresident residing in the United States.

In the matter of community property, the act provided that when the husband by testamentary disposition of such property forced his surviving wife to elect whether to take under his will or by operation of law, any property, whether community or separate, not exceeding one-half of the value of the total community, which she might elect to take under the will was not subject to the act. The act also limited the provision in the 1921 act relative to the classification as community of personal property acquired outside the State, to intangible personal property thus acquired. In addition, it provided that the whole of any community transferred inter vivos by a wife to her husband was not subject to the act.

The act reinstated in the law the provision of the 1913 act which taxed the giving of a power of appointment as a transfer from the donor to the donee of the power.

Inserted in the act was a provision for taxing all transfers (whether by will or otherwise) upon the market value of the property transferred as of the date of the transferor's death, and at the rates and exemptions then in effect. In the same connection, the act provided that in a case of several transfers by a decedent to one person, the tax is imposed upon the market value of the property included in each transfer as of the date of the decedent's death, and at the rates and exemptions then in effect.

Another feature of the act was a provision for taxing every legacy in accordance with the terms of the will by which it is left, regardless of any renunciation or waiver by the legatee, or any agreement by him for the distribution of the legacy otherwise than as provided in the will.

The act provided that in the case of proceeds of life or accident insurance payable to named beneficiaries other than the insured or his estate and issued after the effective date of the act, or issued prior to such date with a right reserved in the insured to change the beneficiary or to secure the cash surrender value, the excess over $50,000 was subject to the act.

The act eliminated as a deduction from market value any succession, inheritance, or estate tax due or paid another state.

The act changed all of the specific exemptions and a large number of the rates of tax.

The act was amended in 1937 (thrice), in 1939, in 1941 (twice), and in 1943.

The first 1937 amendment (Chapter 296, Statutes of 1937; effective August 27, 1937) dealt with tax security bonds, the collection of taxes, and the fees of county treasurers.

The second 1937 amendment (Chapter 333, Statutes of 1937, effective August 27, 1937) related to tax liens.

The third 1937 amendment (Chapter 421, Statutes of 1937, effective August 27, 1937) related to the collection of taxes by county treasurers.

The 1939 amendment (Chapter 694, Statutes of 1939; effective July 6, 1939) extended the charitable exemption to transfers to organizations incorporated under the laws of the United States, and provided for the filing of tax bonds.

The first 1941 amendment (chapter 177, Statutes of 1941; effective April 23, 1941) exempted gifts of powers of appointment limited to be exercised or exercised in favor of charitable beneficiaries; provided that deductible funeral and last illness expenses include those of a deceased wife whether or not she be survived by a husband financially well able to pay such expenses; and deleted a provision taxing any increase accruing on the extinction of a charge or interest against or in transferred property.

The second 1941 amendment (Chapter 833, Statutes of 1941; effective June 25, 1941), among other things, limited the charitable exemption to corporations, etc., organized solely for and engaged exclusively in charitable or like work; extended such exemption to transfers to this State or to the United States; set up a formula for computing the previously taxed property exemption; deleted a provision regarding the appraisal of a contingent or defeasible estate untaxed before the happening of the contingency; provided that a life estate or annuity which terminates before the tax is fixed shall be valued at the present value as of the death of the decedent who gave the estate or annuity of the amount paid or payable to the tenant or annuitant; prescribed a one year statute of limitations for a refund or correction of order fixing tax where a debt is proved against an estate after the payment of a legacy, etc., or where a deduction for a debt was erroneously allowed; changed the method for deducting the fees of a county treasurer where a refund is allowed on an excess or erroneous tax payment; added a provision for furnishing lists of contents of safe deposit boxes; changed the provisions regarding compensation of inheritance tax appraisers in proceedings to determine inheritance tax; amplified the provisions pertaining to writs of execution; increased the maximum annual fees of the Treasurer of the County of Los Angeles.

The 1943 amendment (Chapter 19, Statutes of 1943; effective February 6, 1943) included in the federal war risk insurance exemption the proceeds of federal war risk insurance payable to the estate of a veteran of World War II, and restored the five year limitation provision to the definition of “previously taxed property.”

The Act of 1935, as amended, was codified in 1943 (Chapter 658, Statutes of 1943) as Part 8 of Division 2 of the Revenue and Taxation Code, comprising Sections 13301 to 14901, inclusive, but the effective date of the codification was postponed until July 1, 1945. The code represents the law now in force.

Chapter 697 reduced the rate of interest in computing future, contingent and limited estates from 5 to 4 percent.

Chapter 711 allowed deduction of fees for attorney services in actions to establish death or to determine tax and for other tax services.

Chapter 1014 made numerous clarifications of prior law.

Chapter 1137 amended maximum commissions of county treasurers.

Chapter 78, amended the law relating to maximum commissions of county treasurers.

Chapter 734 included widower of a daughter as a class B transferee; included certain personal property acquired elsewhere as community property; amended law relating to delinquency of additional tax, interest penalty on tax delinquency bonds, procedure for remission of interest, commissions of county treasurers and inspection of records and provided for distribution of copies of the Inheritance Tax Law.

Chapter 820 exempted tax on certain transfers from persons who died in the armed services.

Chapter 300 enacted Uniform Act on Interstate Compromise of Death Taxes.

Chapter 301 adopted Uniform Act on Interstate Arbitration of Death Taxes.

Chapter 684 added procedure for release of real property from inheritance tax lien.

Chapter 1001 amended provisions for maximum commissions of county treasurers.

Chapter 5 provided marital exemption of property equal to clear market value of one-half of decedent's separate property if transferred to the spouse.

Chapter 197 allowed deduction for fees paid to executors, administrators and accountants in preparation of income tax returns or adjustment of estate and inheritance taxes.

Chapter 244 amended provisions relating to county treasurers' commissions.

Chapter 733 included within charitable exemption transfers to certain hospital corporations and membership associations.

Chapter 845 amended provisions relating to the withholding of securities, deposits, etc. and removed penalty of up to $20,000 for failure to comply.

Chapter 1448 limited taxable transfers in contemplation of death to those made within three years of death; amended provisions respecting additional tax delinquency, compromise of taxability of contingent transfers or of tax where decedent is claimed as a nonresident and penalty on delinquent tax bonds; changed interest rate on delinquent taxes to 6 percent and repealed provisions relating to remission of interest.

Chapter 695 included as class A transferees persons adopted during minority by lineal issue or other class A children.

Chapter 974 amended provisions relating to certificates of release of tax lien and to inheritance tax appraisers' fees.

Chapter 1309 amended county treasurers' commissions.

Chapter 1313 provided that a reservation of a life interest is conclusively presumed where the transferor retains possession or enjoyment of the income or interest in the property transferred until his death; added reciprocal collection of inheritance taxes with other states; and amended provisions relating to assisting governmental officers in enforcement of the tax and payment of expenses of special employment.

Chapter 506 provided for exemption of community property transferred to a wife other than by will or succession up to a value not exceeding one-half of total community, amending the previous provision which exempted only one-half of the property transferred.

Chapter 520 amended provision relating to delinquency of additional tax; and added a provision to restate the prior law that joint tenancy of spouses with its source in community property is to be treated as community property for inheritance tax purposes.

Chapter 1175 provided that any allowable deduction, not merely a debt, established or paid after the order fixing tax is made may be the basis for modification of the order.

Chapter 1382 amended provisions relating to county treasurers' commissions.

Chapter 2 exempted public retirement pensions from tax.

Chapter 3 amended provisions regarding taxability of intangible personal property of a deceased nonresident of the United States.

Chapter 287 amended requirement of notice of filing appraiser's report and provided that an endorsed copy of the order fixing tax be mailed to the Controller.

Chapter 403 added provision that the wife has the same interest in all community property whenever acquired that she has in community property since the effective date of Civil Code Section 161a; reworded charitable exemption provisions; amended provisions for countersignature of tax receipts by Controller and provided for optional use of whole dollar amounts in tax reports.

Chapter 490 amended taxability of property to which Sections 201.5 and 201.8 of the Probate Code are applicable.

Chapter 502 amended the deduction of federal estate taxes and revised provisions for previously taxed property to allow a credit rather than an exemption.

Chapter 541 authorized Controller to give a general consent to corporations for transfer of stock upon their obtaining an affidavit of residence.

Chapter 883 amended provision for maximum commissions of county treasurers.

Chapter 1959 provided alternate method for arbitration of domiciliary disputes.

Chapter 1128 increased the rates of tax on transferees in classes C and D and repealed the deduction for federal estate taxes.

Chapter 485 provided that inter vivos transfers made for consideration but for less than adequate or full consideration are taxable only as to the portion in excess of the consideration.

Chapter 1545 authorized the Controller to give a general consent to banks or savings and loan associations for delivery of deposits, etc.

Chapter 1628 amended definition of class B and class C transferees to include an adopted or acknowledged child as a “descendent” within the classes.

Chapter 1684 provided for payment of refunds by the State rather than by county treasurers.

Chapter 1917 provided for the appraisal of estate property located in a county outside of the county whose superior court has jurisdiction and for sharing of the appraisal fees.

Chapter 636 added a provision that joint tenancy between a husband and wife having its source in quasi-community property be treated as furnished half by each spouse.

Chapter 2189 increased the tax rate for class B transferees, reduced the specific exemption of a wife from $24,000 to $5,000, and exempted community property passing to a spouse except where a widow is given a life estate or a power of appointment.

Chapter 522 clarified taxability of intangible personal property of a deceased nonresident of the United States regarding corporate stock and extends the bank deposit exclusion of such nonresidents to savings and loan associations.

Chapter 1711 amended maximum commissions of county treasurers.

Chapter 1749 provided for a single simplified method for obtaining refunds.

Chapter 1840 provided for allowance of deduction for casualty losses.

Chapter 1070 exempted a life estate given in community property to a widow, clarified that only decedent's half of community property is subject to tax to third parties, provides for the conversion of separate property to community property to be treated as half the separate property of each spouse, and revised provisions for transfers of powers of appointment to include the exercise or nonexercise of a general power to be treated as a taxable event in addition to taxing the creation of a power, various powers of appointment being specifically defined.

Chapter 1181 clarified reciprocity of taxation regarding intangible personal property of nonresidents.

Chapter 1409 exempted charitable use transfers in trust though the California trustee may not be organized solely for charitable purposes.

Chapter 963 (effective July 29, 1967 at 7:00 p.m.) combined transferee class D with class C; increased tax rates on all classes; required tax collections be paid by county treasurers to State Treasurer within 15 days of receipt.

Chapter 1481 (effective November 8, 1967) revised the consent to transfer procedure and authorized Controller to issue general consents or dispense with requirements where tax is not in jeopardy.

Chapter 1968 revised class A transferee rules regarding children adopted by stepparents.

Chapter 1200 combined into a single provisions the rules regarding classification of adopted children; and updated the mortality and actuarial tables to be used at 3 1/2 percent per annum in valuing future interests including life estates and annuities.

Chapter 514 provided that a transfer of certain powers to trustees to make discretionary payments to beneficiaries is a transfer to the trust beneficiaries.

Chapter 1282 (operative July 1, 1971) enacted revisions of inheritance tax appraiser system, changed title to “inheritance tax referee”; provided for qualifying examinations, appointment rules, four-year terms, removal procedure and for political activity limitations.

Chapter 1440 provided for transition of positions of inheritance tax appraisers to referees.

Chapter 1453 provided a method of appraisal at taxpayer's option in determining fair market value of land which is subject to open-space restrictions, operative until December 31, 1974.

Chapter 53 authorizes Controller to enter into tax payment agreements in undue hardship cases in order to permit earlier distribution of an estate.

Chapter 119 provides a procedure for determination of tax by the Controller where no court proceeding is pending.

Chapter 1205 provided for joint trustee accounts of spouses to be treated under specified conditions the same as joint tenancy accounts.

Chapter 1420 allowed the insurance exemption to apply to certain life insurance proceeds payable to a trust created under the will of the decedent.

Chapter 1 changed tax delinquency to 9 months after death in lieu of 24 months after death and repealed the 5 percent discount for early payments.

Chapter 579 provided that the age of adoption for tax exemption purposes to be reduced from 21 to 18.

Chapter 990 adopted new Civil Code disclaimer provisions for inheritance tax purposes.

Chapter 1303 revised maximum commissions of county treasurers.

Chapter 19 (effective April 11, 1973) provided exemption benefits for certain transfers and insurance of Vietnam War decedents, as part of the P.O.W. Homecoming Act.

Chapter 637 (effective September 21, 1973) amended classification of persons adopted when over 18 years of age.

Chapter 101 revised and updated life expectancy and actuarial tables to be used in valuing future, contingent or limited estates, utilizing 6 percent in lieu of former 3 1/2 percent rate.

Chapter 444 provided a revised procedure for modifying a erroneous order fixing tax.

Chapter 752 provided for appraisal and tax report by an inheritance tax referee under new Probate Code procedure for confirmation of community property passing to a spouse without administration.

Chapter 1075 revised method of computing commissions of county treasurers.

Chapter 661 increased interest rate for late payment of tax from 6 percent to 12 percent per annum.

Chapter 942 taxed deceased spouse's one-half interest in community property passing to the surviving spouse, eliminated the distinction as to community property converted from separate property, changed the separate property marital exemption to an exclusion and increased the specific exemption for a surviving spouse from $5,000 to $60,000.

Chapter 150 deleted from the deduction provisions express reference to funeral and last illness expenses of a deceased wife.

Chapter 365 further defined and extended the scope of the State Personnel Board's administration of the inheritance tax referee's qualification examination.

Chapter 922 required the inheritance tax referee file the referee's report with the court upon completion of the appraisement and within 60 days after receipt of all information and documentation necessary to assess the tax or to issue a no tax certificate.

Chapter 1230 further defined the undue hardship requisite to entering into tax payment agreements in order to permit earlier distribution of an estate.

Chapter 694 further clarified provisions of Stats. 1970, Chapter 514, by expressly providing the discretionary power of a trustee to make payments for the benefit of trust beneficiaries other than the trustee is not a power of appointment even though the discretion of the trustee is absolute and includes the power to terminate the trust.

Chapter 1079 aggregated lifetime transfers with transfers subject to inheritance tax for the purpose of determining the inheritance tax rate, repealed gift tax credit provisions and renumbered the previously taxed property credit provisions, included as a taxable transfer the gift tax paid on lifetime transfers subject to inheritance tax, added a new orphan's exemption and added a new generation skipping transfer tax as Part 9.5 of Division 2 of the Revenue and Taxation Code.

Chapter 58 provided county treasurers of counties with a population of less than 25,000 may elect to remit inheritance tax moneys to the state treasurer on a monthly basis.

Chapter 604 provided for payment of interest on refunds at a rate indexed to the federal reserve rate on each January 1, not to exceed 7 percent per annum.

Chapter 1096 provided the transferee of a dwelling owned and occupied by the decedent at date of death may, under stated conditions, elect to pay the tax attributable to the dwelling in five annual installments, and that the tax shall accrue interest at the rate of 7 percent per annum during the five-year period.

Chapter 1144 provided a procedure whereby a transferee may dedicate to the state real property devoted to open space use in payment of the inheritance tax, and that the county treasurer shall accept the notification of acceptance as payment of tax.

Chapter 1181 included a timber-growing enterprise within the definition of qualified family property under the undue hardship installment payment provisions.

Chapter 1388 provided that only lifetime gifts made after December 31, 1976, shall be aggregated with transfers subject to inheritance tax for the purpose of determining the inheritance tax rate, and added gift tax credit provisions applicable to includable gifts made prior to January 1, 1977.

Chapter 731 eliminated requirement that receipt countersigned and sealed by the Controller be on file prior to a decree of distribution, provided that receipt from county treasurer certifying the payment of all tax plus interest shall constitute proof of payment, and required that inheritance tax referee file the referee's report with court within 60 days after receipt of all information and documentation necessary to assess the tax or to issue a no tax certificate.

Chapter 1005 declared Legislature's intent that the provisions of Chapter 1388 of the Statutes of 1978 (limiting unification to only gifts made after December 31, 1976) shall apply retroactively to all cases where the date of death is after the effective date of Chapter 1079 of the Statutes of 1977, i.e., 5:15 p.m., September 26, 1977.

Chapter 1075 provided for waiver of interest for late payment of tax upon a showing that tax was not paid prior to delinquency date solely because of the failure of a public official to perform his or her duties in a timely manner.

Chapter 1168 provided Class A and Class B beneficiaries who receive qualified family property may elect to make installment payments of the tax without the necessity of showing undue hardship, expanded definition of qualified family property to conform to similar provisions contained in the federal estate tax law and provided for an adjusted rate of interest where the tax is paid in installments pursuant to an agreement with the Controller.

Chapter 55 further clarified the provisions of Chapter 1282 of Statutes of 1970 by expressly providing the authority of a person to act as an inheritance tax referee ceases immediately upon the expiration of that person's term of office.

Chapter 634 provided transfers to a spouse are excluded from the tax except where spouse receives a limited power of appointment in any part, or all, of the decedent's property; increased the specific exemption for all other classes of beneficiaries; provided special use valuation, under specified conditions, for certain real property; provided several different plans for payment of tax in installments subject to specified conditions; eliminated role of county treasurer in administration of tax; and eliminated requirement that tax be paid before a decree of distribution may be made.

Proposition 6, an initiative statute which was adopted by the voters at the June 8, 1982, Direct Primary Election, repealed Part 8 (commencing with Section 13301), known as the Inheritance Tax Law, and Part 9 (commencing with Section 15101), known as the Gift Tax Law, of the Revenue and Taxation Code, the inheritance and gift tax provisions were replaced by an estate tax in an amount equal to the maximum allowable federal estate tax credit for state death taxes.