Asset and Tax Planning for non-US Residents with US Assets

Non-US domiciliaries have a personal federal estate tax exemption of only USD 60’000. Subject to taxation are all assets located in the United States. This exemption amount may be increased based on bilateral tax treaties between the United States and a few select countries.

Often overlooked is the fact that bank accounts not connected to a trade or business are not considered to be assets located in the United States.

The exposure to US estate taxes can be reduced by gifting or selling the intangible US situs assets.

Non-US domiciliaries do not pay US gift tax on intangible assets (for example stocks or bonds) given away as gifts. This is not limited to charitable donations.

Equally, non-US residents do not pay US capital gains taxes on the sale of intangible US assets (stocks, bonds). Of course, these gains may be taxable in their home country.