2026 Monetary Thresholds Remain Largely "Unchanged"

For 2026, the exemptions, deductions, and tax brackets for Estate and Gift Tax will generally follow the standards announced in the previous year.

✅ Therefore, the key focus in recent years is not on the specific amounts, but rather on "How specific scenarios are determined" and "How tax liability is allocated."

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Most Important Recent Update:

"Gifts to a Spouse" within 2 Years of Death are Still Taxed, but Liability Allocation is Clearer.

If the decedent gifted property (commonly: cash, stocks, or real estate transfers) to their spouse within 2 years prior to passing away, this gift is legally classified as "Deemed Estate" (擬制遺產) for Estate Tax purposes and, in principle, will still be included in the taxable estate.

The recent change lies in "Who bears the tax burden": To avoid the unfair situation where "someone who didn't receive the property has to pay tax on it," the tax authorities have clarified their operational direction. It typically works as follows:

• When the National Taxation Bureau assesses the tax, they will split the tax amount related to the "Spousal Gift within 2 Years" so that the spouse is primarily responsible for it.
• In practice, you may see separate tax bills issued, allowing the spouse to pay the specific tax portion corresponding to the property they received.

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✅ Our Advice: If your family plans to strictly execute "Asset Transfers Between Spouses" or "Large Adjustments Near Retirement/Old Age," you must plan for both the "2-Year Rule" and the "Tax Source (Cash Flow)" together.

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3) Common Myth: Insurance Proceeds ≠ "Completely Tax-Free"

Many people mistakenly believe: "Insurance proceeds are not estate, so they won't be taxed at all." In practice, you need to look at this from two different angles:

1. Estate Tax Angle: Most "Life Insurance Proceeds with a Designated Beneficiary" are typically excluded from the gross estate (though individual cases still need to be reviewed for compliance).
2. Alternative Minimum Tax (AMT) / Basic Income Angle: Certain insurance payouts may trigger the Income Basic Tax, potentially exceeding the exemption threshold.

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✅ Our Advice: Conduct a "Dual-Track Check" for your insurance portfolio to avoid assuming assets are isolated, only to find them taxable under a different tax system.

How the "Dreamer Team" Can Assist You

To ensure your planning is actionable and to reduce future procedural costs for your family, we typically start with an "Inheritance & Transfer Health Check":

A. Asset Inventory (Confirm direction in just 10–15 minutes)

• Key Asset Types: Cash, Stocks, Company Equity, Real Estate, Insurance Policies (including beneficiary arrangements).
• Review of Recent Actions (Last 2 Years): Spousal gifts, gifts to children, equity transfers, or real estate title transfers.
• Family Structure: Spouse, children (including minors), and any members with special care needs.

Goals We Aim to Achieve:

• Reduce tax burden / Execute early transfers.
• Avoid family disputes / Ensure clear distribution.
• Protect assets / Isolate business risks.
• Reserve cash flow for tax payments.

B. Proposal of Feasible Solutions (Based on your preferences and compliance requirements)

• Discussion and planning of Trust Structures (tailored to your specific needs).

(Disclaimer: The information above is a general summary and does not constitute individual legal or tax advice. Actual application is subject to individual case facts, documentation, and the determination of the competent authorities.)

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