Overview of Unified Estate and Gift, Estate, and Succession Taxes
Unified Estate and Gift Tax
(For gifts made and estates of decedents dying on or after January 1, 2005)
In legislation signed by the Governor on June 30, 2005, the Connecticut General Assembly made significant changes affecting the Connecticut gift tax, the Connecticut estate tax, and the Connecticut succession tax for gifts given and estates of decedents dying on or after January 1, 2005.
For estates of decedents dying on or after January 1, 2005, a unified estate and gift tax return must be filed for all deceased Connecticut residents, and nonresidents owning real or tangible personal property located in Connecticut. If no tax is due, Form CT-706 NT must be filed with Probate Court only. If tax is due, Form CT-706/709 must be filed with DRS, and a copy with Probate Court.
For gifts alone (not an estate) made in calendar years beginning on or after January 1, 2005, Form CT-706/709 must be filed with DRS and not with Probate Court.
Please review SN 2005(10), 2005 Legislation Repealing the Succession Tax and Amending the Connecticut Gift Tax and the Connecticut Estate Tax, for detailed information.
Succession (Inheritance) Tax
(For estates of decedent’s dying before January 1, 2005)
The Connecticut succession tax applies, subject to allowable exemptions and deductions, to the transfers upon death and to transfers made by inter vivos arrangements in contemplation of, or taking effect at, the transferor’s death. The exemption amounts and tax rates vary based on the date of the decedent’s death, and the relationship of the beneficiary to the decedent.
For estates of decedent’s dying before January 1, 2005, a succession tax return must be filed for all deceased Connecticut residents, and nonresidents owning real or tangible personal property in Connecticut, even if no tax is due.
For estates of decedents dying on or after January 1, 2005, the succession tax is repealed and the succession tax return filing requirement is eliminated.
Estate Tax
(For estates of decedents dying on or after July 1, 2004, and before January 1, 2005)
The Connecticut estate tax applies to certain estates of decedents. For estates of decedents dying on or after July 1, 2004 and before January 1, 2005, the Connecticut estate tax is imposed on estates that are subject to federal estate tax, as well as on certain estates that are not subject to federal estate tax. When imposed on estates, the Connecticut estate tax is generally 130% of the credit allowable for state death taxes on federal Form 706, as computed on Table B of the instructions for federal Form 706.
Please review SN 2004(1.1), Special Estate Tax on Estates of Decedents Dying On or After July 1, 2004, and Before January 1, 2005.
(For estates of decedents dying before July 1, 2004)
For estates of decedents dying before July 1, 2004, the Connecticut estate tax generally equals the credit allowable for state death taxes on federal Form 706, United States Estate (and Generation Skipping Transfer) Tax Return, thereby shifting a portion of the federal estate tax to Connecticut. For estates of decedents dying before July 1, 2004, whenever an estate is required to file federal Form 706, the estate must file a Connecticut estate tax return for Connecticut residents and for those nonresidents owning real or tangible person property located in Connecticut.
