Ch. 2

LAWS OF MARYLAND

The Tax - General Article Review Committee notes, for
consideration of the General Assembly, that the
current procedures for prepayment of inheritance tax
are cumbersome. In the vast majority of cases, the
tax is prepaid. Registers view the procedures, based
on actual practice, to be an election not to prepay
the tax, rather than the statutorily prescribed
"application to prepay the ... tax". If prepayment is
not made, the State must wait for its money, and the
person in whom the property ultimately vests generally
is responsible for a considerably higher inheritance
tax. The General Assembly may wish to consider making
prepayment of the inheritance tax for subsequent
interests mandatory, absent a determination by a court
that it is unlikely that the interest will vest in the
possession of an applicant for exemption.

Defined terms: "County" § 1-101

"Inheritance tax" § 1-101

"Less than absolute interest" § 7-201

"Person" § 1-101 "Property" § 1-101

"Property that passes from a decedent" § 7-201

"Register" § 7-101 "Subsequent interest" § 7-201

7-220. EFFECTS OF PREPAYMENT ON SUBSEQUENT INVASION OF CORPUS.

(A)  IN GENERAL.

EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, IF THE
TOTAL INHERITANCE TAX DETERMINED ON ALL INTERESTS IN PROPERTY IS
PAID WHEN DUE AND EQUALS THE INHERITANCE TAX THAT WOULD HAVE BEEN
DUE IF AN ABSOLUTE INTEREST IN THE PROPERTY PASSED FROM THE
DECEDENT, ADDITIONAL INHERITANCE TAX IS NOT DUE BECAUSE OF A
SUBSEQUENT INVASION OF THE CORPUS BY OR FOR ANY PERSON UNDER THE
TERMS OF THE INSTRUMENT THAT CREATED THE PROPERTY INTERESTS.

(B)  EXCEPTION.

(1)  IF THE TAX RATE APPLICABLE TO THE PERSON INVADING
THE CORPUS EXCEEDS THE TAX RATE ALREADY PAID ON THE PROPERTY,
ADDITIONAL INHERITANCE TAX SHALL BE DUE ON THE PROPERTY
WITHDRAWN.

(2)  THE AMOUNT OF ADDITIONAL INHERITANCE TAX DUE
UNDER PARAGRAPH (1) OF THIS SUBSECTION IS THE DIFFERENCE BETWEEN
THE INHERITANCE TAX THAT WAS PAID ON THE PROPERTY AND THE
INHERITANCE TAX THAT WOULD HAVE BEEN DUE ON THE PROPERTY IF
DETERMINED AT THE HIGHER RATE.

REVISOR'S NOTE: This section is new language derived
without substantive change from former Art. 81, §
161(d).

In subsection (a) of this section, the words "when
due" are added to clarify that not only full, but
timely, payment is required.

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