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Gift Tax

Types of income tax

There are two types of gift tax
  1. The giver is taxed
  2. The receiver is taxed
In the first instance the reasoning is that the giver is trying to avoid inheritance tax, and so a form of tax, conditions or disincentive is applied to try and stop this happening.
In the second instance the reasoning is the receiver is trying to avoid tax on income they are receiving, so an income tax is applied.