US Estate Tax for non-US domiciliaries
If you’re a non-US domiciliary, you’re subject to US estate on the transfer of US situated property, which may include both tangible and intangible assets owned at the decedent’s date of death and gift taxation on certain types of US assets at up to 40%. However, your exemption at only $60,000 is much lower than that of US domiciliaries. This exception is not indexed for inflation and the exemption is only available for transfers at death.
Because the non-US domiciliary exemption is much lower than for a US domiciliary, many people with US assets could be within the scope of US estate and gift tax.
As a non-US domiciliary, you’re taxed on the value of your US situs assets. Here are some of the most common US assets subject to US Estate Tax:
- US situs real estate property
- Shares in US corporations
- Tangible personal property
- Interests in partnerships that do business in the US
- Partnerships or grantor type trusts that own US situs assets
- Bank accounts connected to a US trade or business (but not personal bank accounts)
- US pension plans such as IRAs