How do governments assess private companies for estate tax considering they are not bought and sold and thus the shares to not have a price?

Question

Based on an discussion i had with friends, if its a large private company, but one which is not valued by the market how does the government assess it for inheritance tax purposes? cant i just sell/assess the shares for 100 dollars total even if its worth 100 million?

In: Economics

Answer 1

This may differ from country to country but at least in Portugal you don’t pay taxes based on the value of the company but rather on its profits and on whether they pay dividends.

By extension, you don’t pay taxes just for inheriting (part of) a company.