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The United States has an Estate Tax
That Will Hit Nonresidents with US property.
A deceased nonresident that owns
property in the USA will be subject to US federal estate taxes
if the value of that property on the date of death exceeds $60,000.
The decedent may also be subject to state death taxes in the state
in which the property is located. The estate tax rate goes
from 15% to 35% of the fair market value of the property in the U.S.
that belonged to the deceased nonresident.
Nonresidents often own real
estate, bank accounts, us stock and bonds, collections, and other
tangible property situation in the U.S. upon their demise. In
that event if the total value of those assets exceed $60,000 a US
nonresident estate tax return must be filed. They cannot leave all
of their assets to their surviving spouse and eliminate any estate
taxes with the marital deduction as can U.S. citizens and permanent
residents.
Even nonresidents living in the
US for only several years before returning to their home country may
be subject to these rules depending on their tax domicile on the
date of their death.
The tax return is due 9 months
from the date of death but can be extended for an additional 6
months. If any taxes might be owed it is best to pay them in prior
to the expiration of the 9 month period to avoid interest or
penalties.
The U.S. does have estate tax
treaties with 17 countries that may alter the general estate tax
rules with respect to residents of those countries which have
property in the U.S. Those treaties or protocols should be reviewed
carefully to determine their effect.
USA ESTATE TAX TREATIES IN
EFFECT
| Australia
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Italy |
| Austria
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Japan |
| Canada*
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Netherlands |
| Denmark
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Norway |
| Finland
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South Africa |
| France
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Sweden |
| Germany
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Switzerland |
| Greece
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United Kingdom (England) |
| Ireland |
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* Contained in the United States - Canada Income Tax Treaty
If you are reporting any items on a nonresident Form 706NA estate
tax form based on the provisions of a death tax treaty or protocol,
you should attach a statement to the return disclosing the return
position that is treaty based (Reg. 301.6114-1)
As a nonresident you may need help filing an estate tax return on
your US property or planning in advance for you in order to try to reduce the US estate taxes as
low as possible. we have the expertise to help. Email or phone our
offices.
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