The relative importance of inheritances in Norway

Master thesis English OPEN
Johansson, Marianne Lefsaker;
(2014)

In a very influential paper, Piketty (2011) finds that inherited wealth is of increasing importance in France. He describes a U-shaped pattern in the long-run development of inheritance flows. Two driving factors in this development are the relative ratio of wealth of t... View more
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    2 Theoretical background 3 2.1 Why do people leave bequests? . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2 Taxation of wealth transfers . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2.1 Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.2 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.2.3 Costs of taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.3 How do bequests develop over time? . . . . . . . . . . . . . . . . . . . . . . 10

    3 The development of wealth and inheritances in Norway 11 3.1 Official inheritance statistics . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.2 Overview of Norwegian inheritance law and tax rules . . . . . . . . . . . . 13 3.3 Wealth statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.4 Wealth statistics - micro data . . . . . . . . . . . . . . . . . . . . . . . . . 19

    4 Examining inheritance tax planning behavior 22 4.1 Avoidance opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4.2.1 Tax avoidance by converting assets . . . . . . . . . . . . . . . . . . 25 4.2.2 Reducing the inheritance tax base by spreading wealth . . . . . . . 30

    5 Imputing aggregate inheritance as a share of income 30 5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 5.2 Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 5.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

    1 Average net wealth and wealth assets for the bottom 95 percent of the wealth distribution in 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

    2 Average net wealth and wealth assets for the top 5 percent of the wealth distribution in 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

    3 Households' wealth and income 1998 - 2012 . . . . . . . . . . . . . . . . . 34

    4 Inheritance flows Norway 1998 - 2012 . . . . . . . . . . . . . . . . . . . . . 36

    Andreoni, J. (1989). Giving with impure altruism: Applications to charity and Ricardian equivalence. The Journal of Political Economy, 97(6), p.1447.

    Atkinson, A. (2013). “Wealth and Inheritance in Britain from 1896 to the present”, CASE/178, Centre for Analysis of Social Exclusion, London School of Economics.

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