Tax efficiency

Tax efficiency

A financial process is said to be tax efficient if it is taxed at a lower rate than an alternative financial process that achieves the same end. [ [http://www.investorwords.com/4893/tax_efficient.html Investor Words definition of "tax efficient"] ]

Passing one's assets onto one's heirs using a Grantor Retained Annuity Trust, for example, is potentially more tax efficient than simply letting the heirs inherit the assets.

References


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