Concept
The US estate tax for non-citizen, non-resident individuals is structured harshly: only $60,000 of US-situs assets is exempt, with everything above that taxed at rates up to 40%. By comparison, US citizens and residents enjoy exemptions measured in millions.
🍓 Non-residents of the US receive only a $60,000 estate tax exemption on US-situs assets (US real estate, US company stocks), while the rate reaches up to 40%.
What Counts as US-Situs
US-situs assets include US real estate, shares of US companies (even if purchased through a foreign broker and held outside the US), interests in certain businesses, and US retirement accounts. US company stocks are the most common and unexpected trap.
What Usually Escapes the Trap
US bank deposits (generally), debt securities qualifying for portfolio interest, and properly structured holding companies can remove assets from US-situs classification. But the details are critical, and "self-treatment" is dangerous here.
⚙️ The $60,000 threshold is not indexed for inflation and has not increased for decades. The return is filed on Form 706-NA.
Estate and Gift Tax Treaties
The US has approximately 15 estate and gift tax treaties with other countries; these may provide increased exemptions and credits. The presence or absence of such a treaty with the decedent's country radically changes the calculation.
How to Protect
🔗 Related
Offshore companies · Succession planning · Applicable law and Brussels IV · Trusts and inheritance tax · Life insurance as a succession tool
Typical solutions include holding US stocks and real estate through a foreign (non-US) company or "blocker" structure, using life insurance, and carefully selecting asset classes. The structure must be built in advance: after death, it is impossible to change the situs.
⚠️ A foreign investor with a portfolio of US stocks in a brokerage account may unexpectedly leave heirs with a 40% tax on amounts exceeding $60,000. This is not theory—it's the most common mistake.
💡 A holding "blocker" is often built using an offshore company—see Offshore companies.
This material is for informational purposes only and does not constitute individual legal advice.
Key factual claims
- The US estate tax for non-citizen, non-resident individuals is structured harshly: only $60,000 of US-situs assets is exempt, with everything above that taxed at rates up to 40%.
- The US has approximately 15 estate and gift tax treaties with other countries; these may provide increased exemptions and credits.