The Generation Skipping Transfer Tax (GSTT) has all the following characteristics, except:

GST gifts to direct skips qualifying for the annual exclusion are not subject to the tax.

Assets transferred to a trust that has a grandchild as the sole beneficiary may be subject to both gift and generation skipping transfer tax.

If all the children of a trust are grandchildren (whose parents are living) of the grantor then the trust is subject to GSTT.

A skip person is a person who is one or more generations younger than the transferor.