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The United States is one of the most popular investment markets for foreign nationals. Individuals around the world hold:
Yet many foreign investors are not aware that, under U.S. estate tax rules, non-resident individuals may be exposed to estate tax on certain U.S.-situated assets, often referred to as U.S.-situs assets.
One of the most commonly referenced thresholds is:
Foreign nationals often ask:
This guide provides an overview of how U.S. estate tax applies to non-residents holding U.S. assets.
It is educational information only, not legal or tax advice.
This guide provides a clear, educational overview of how the United States applies estate tax to non-resident, non-citizen individuals who hold U.S.-situs assets. After reading, you will understand:
This guide is educational only and does not constitute personalised tax, legal, or estate planning advice.
Estate tax residence is different from income tax residency.
For estate tax purposes, a “non-resident” is generally:
Non-residents for estate tax purposes are subject to different rules, including the $60,000 U.S.-situs asset threshold.
For non-residents holding U.S.-situs assets:
(not to be confused with the U.S. lifetime exemption for citizens/residents).
This threshold refers to:
If the total value of U.S.-situs assets exceeds $60,000:
This $60,000 threshold has existed for decades and is not indexed for inflation.
U.S.-situs assets are generally those located or considered situated in the United States.
Common examples include:
Shares of U.S. corporations are typically considered U.S.-situs property for estate tax purposes.
This applies regardless of:
Owning U.S. equities through a foreign brokerage does not necessarily change the situs.
U.S. real estate is U.S.-situs property.
Examples:
Ownership interests in certain U.S. companies or partnerships may be treated as U.S.-situs property.
Items physically located in the United States may be included in the U.S. estate.
U.S.-source debt instruments may be U.S.-situs unless exceptions apply.
These categories are general and vary case by case.
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Non-residents do not receive the same estate tax exclusion as U.S. citizens or residents.
may receive a multi-million-dollar estate tax exemption (subject to adjustments).
receive a $60,000 exemption for U.S.-situs property only, unless a treaty applies.
The estate tax rate can be up to 40%, depending on asset value and structure.
Treaty relief may modify the result.
The United States has estate and gift tax treaties with a limited number of countries.
Examples include:
These treaties may:
If the individual is domiciled in a treaty country, relief may depend on the specific treaty.
Treaties can vary significantly.
Example themes (not advice):
These outcomes depend entirely on treaty provisions.
A common misconception is:
“If I hold U.S. stocks in a non-U.S. brokerage, estate tax does not apply.”
Generally, U.S. estate tax rules look at the underlying asset—not the custodian location.
Thus:
even when held through:
May be treated as U.S.-situs depending on the underlying asset.
U.S.-domiciled ETFs are generally U.S.-situs.
Foreign-domiciled funds holding U.S. stocks may not be U.S.-situs, but income tax rules (PFIC) are separate.
Non-residents commonly invest in U.S. real estate.
General estate tax treatment:
Ownership structures vary in their U.S. estate tax implications.
In many cases, U.S. bank deposits are not treated as U.S.-situs property for estate tax.
Exceptions exist.
These accounts are generally considered U.S.-situs property for estate tax purposes.
Taxation depends on:
Classification may depend on asset type.
Double taxation may occur when:
Estate tax treaties may reduce overlap depending on circumstances.
Individuals often evaluate:
This article does not provide recommendations.
Suitability varies by individual circumstances.
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These examples do not represent actual clients or outcomes.
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Skybound Wealth USA assists individuals with:
Conflict Disclosure:
Skybound Wealth USA may receive advisory fees when individuals choose services involving assets under management.
Individuals should review all available options before making decisions.
If you would like to understand how U.S. estate tax may apply to your U.S.-situs assets as a non-resident, you may schedule a discussion with Skybound Wealth USA.
Suitability of any planning approach depends entirely on individual circumstances and may require professional advice.
Tom Pewtress is a fee-based fiduciary adviser and Head of USA at Skybound Wealth USA. He helps U.S. citizens, dual-nationals and internationally mobile families manage their financial lives across borders. Tom specialises in U.S. retirement accounts, 401(k) and IRA decisions, Roth strategies, tax-aware investing and long-term planning for globally mobile households.
This material is for general informational purposes only and does not constitute personalised financial, legal, tax, or estate planning advice.
Tax and estate rules vary by jurisdiction and may change.
Hypothetical examples do not represent actual clients or outcomes.
Investment and estate decisions should be based on individual circumstances.
Past performance does not predict future results.
Skybound Wealth USA is an SEC-registered investment adviser; registration does not imply any specific level of skill or training.
Please review Form ADV Part 2A, Part 2B, and Form CRS for full disclosures.
In this 30-minute session, an adviser will help you:
Get clarity on how U.S. estate tax rules affect non-residents and what planning steps may be worth considering.
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