A gift tax is the amount of money due from the gifter after death and in life on a particular gift of money or property to another individual. It is a transfer tax. The gift tax may be a federal and/or a state matter. It is to be paid annually to either level of government in certain circumstances. Federal laws, however, restrict both the amount a giver may gift and the amount an individual may receive without having to pay a gift tax. It is only after the gifted amount is surpassed that the gift tax is applied. A gift of property and/or money prior to death is one way an individual may avoid paying estate or inheritance taxes after death. In fact, it is one of the most familiar methods of circumventing estate taxes.