{"id":4987,"date":"2021-10-06T10:25:34","date_gmt":"2021-10-06T10:25:34","guid":{"rendered":"https:\/\/www.irstaxapp.com\/?p=4987"},"modified":"2021-10-06T10:25:40","modified_gmt":"2021-10-06T10:25:40","slug":"estate-gift-tax-liability-on-non-us-citizen","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/","title":{"rendered":"Estate &#038; Gift Tax Liability : 8 Things Every Non-US Citizen Should Know"},"content":{"rendered":"\n<p><em>Estate &amp; gift tax<\/em> law applicable to a non-US citizens who live, work, or own property in the United States is different than a USA citizen.On death of a domoiciled non-us citizen ,  the US situs properties  may have adverse tax consequences. Similarly, lifetime transfers by non-US citizens may also be subject to <a href=\"https:\/\/www.irstaxapp.com\/form-3520-gifts-or-bequests-received\/\">US gift tax<\/a>. This post is therefore dedicated to tax issues pertaining to the estate of a non-us citizen.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-66297da7301e9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-66297da7301e9\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#Who_among_non-us_citizens_is_subject_to_gift_and_estate_tax\" title=\"Who among non-us citizens is subject to gift and estate tax?\">Who among non-us citizens is subject to gift and estate tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#What_are_the_parameters_of_determining_if_you_are_domiciled_in_USA\" title=\"What are the parameters of determining if you are domiciled in USA?\">What are the parameters of determining if you are domiciled in USA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#What_assets_subject_to_estate_tax_for_domiciled_persons\" title=\"What assets subject to estate tax for domiciled persons ?\">What assets subject to estate tax for domiciled persons ?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#What_if_the_property_is_jointly_owned_with_the_spouse\" title=\"What if the property is jointly owned with the spouse?\">What if the property is jointly owned with the spouse?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#Is_there_any_deduction_available_to_surviving_spouse\" title=\"Is there any deduction available to surviving spouse ?\">Is there any deduction available to surviving spouse ?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#List_of_countries_with_which_USA_has_estate_gift_tax_treaty\" title=\"List of countries with which USA has estate &amp; gift tax treaty ?\">List of countries with which USA has estate &amp; gift tax treaty ?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#Is_there_any_special_tax_estate_gift_tax_rate_in_case_of_domiciled_person\" title=\"Is there any special tax estate &amp; gift tax rate in case of domiciled person?\">Is there any special tax estate &amp; gift tax rate in case of domiciled person?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.irstaxapp.com\/estate-gift-tax-liability-on-non-us-citizen\/#When_a_non-us_citizen_must_file_estate_tax_return\" title=\"When  a non-us citizen  must file estate tax return ?\">When  a non-us citizen  must file estate tax return ?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_among_non-us_citizens_is_subject_to_gift_and_estate_tax\"><\/span>Who among non-us citizens is subject to gift and estate tax?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An individual who is <strong><em>considered domiciled in the US<\/em><\/strong><br>for estate and gift tax purposes is subject to US estate and gift<br>tax on worldwide assets. <\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>A person is considered to be domiciled in the US for estate and gift tax purposes if he or she lives in the US and has no present intention of leaving. <\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_parameters_of_determining_if_you_are_domiciled_in_USA\"><\/span>What are the parameters of determining if you are domiciled in USA?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>One very important point to note is that being a domicile for estate and gift tax purposes is quite different than determining US  tax residency. So even if you are not a tax resident of the USA, still you may pass the test of domicile for the purpose of estate or gift, therefore liable for a gift or estate tax. So here are parameters to test if you fall in the category of &#8220;<strong><em>domiciled in the USA<\/em><\/strong>&#8220;.<\/p>\n\n\n\n<ol class=\"is-style-tw-border has-purple-background-color has-background\"><li>Intent as reflected in various documents like  visa applications, tax returns, will, etc.<\/li><li>What is the length of residency in USA?<\/li><li>Do you hold a <strong><em>Green card <\/em><\/strong><em>? If yes , you are<\/em><strong><em> <\/em><\/strong><em>subjects to US income tax<\/em> on <em>worldwide income even if you are living outside the US<\/em>.<\/li><li>Country of citizenship and your ties to this country.<\/li><li>Style of living in the US and abroad<\/li><li>Location of your business interests.<\/li><li>In which country you have some basic rights like church affiliations, voting registration, and driver licenses etc <\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_assets_subject_to_estate_tax_for_domiciled_persons\"><\/span>What assets subject to estate tax for domiciled persons ?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you are proven as a USA domiciled person,  your worldwide assets are subject to estate tax in the same manner as US citizens. This is in contrast with a  Non-US domiciliary whose estate is taxed only on the value of their assets located in the USA.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_if_the_property_is_jointly_owned_with_the_spouse\"><\/span>What if the property is jointly owned with the spouse?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The answer to the questions depends on whether the surviving spouse was a US citizen or not. <\/p>\n\n\n\n<p>If the surviving spouse was a non-us citizen, in that case, the point of determination is whose assets were used to acquire the property. <\/p>\n\n\n\n<p>If the surviving spouse proves that it was his\/her money that was used to acquire the property, tax can not be levied on the estate as it will not be considered as owned by the deceased person.<\/p>\n\n\n\n<p>If the surviving spouse is a US citizen, then fifty percent of the property will be included in the estate of the first spouse to die.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_there_any_deduction_available_to_surviving_spouse\"><\/span>Is there any deduction available to surviving spouse ?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It depends on the facts whether the surviving spouse is a US citizen or not ?<\/p>\n\n\n\n<p>In case of a surviving spouse who is a US citizen an unlimited amount of assets owned by deceased spouse can pass to him\/her without being subject to US estate tax. Further, surviving spouse who is a US citizen can also <a href=\"https:\/\/www.irstaxapp.com\/who-must-file-estate-tax-return-when\/\">file estate tax return<\/a> and claim  any exemption amount related to deceased spouse not utilized in addition to his or her own<br>exemption. <\/p>\n\n\n\n<p>If case surviving spouse is not a US citizen, the marital deduction is generally not allowedexcept by virtue of estate and gift tax treaties if signed by USA and country of which surviving spouse is citizen of .Estate tax treaties between the U.S. and other countries  may have  favorable tax treatment to non-us citizen by limiting the type of asset considered situated in the U.S. and subject to U.S. estate taxation. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"List_of_countries_with_which_USA_has_estate_gift_tax_treaty\"><\/span>List of countries with which USA has estate &amp; gift tax treaty ?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following countries have signed estate &amp; gift tax treaties with USA.<\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><em>Australia, Austria, Canada, Denmark,Finland, France, Germany ,Greece<br>Ireland, Italy ,Japan ,Netherlands,Norway, South Africa, Switzerland, United Kingdom<\/em>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_there_any_special_tax_estate_gift_tax_rate_in_case_of_domiciled_person\"><\/span>Is there any special tax estate &amp; gift tax rate in case of domiciled person?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>No, the estate &amp; gift tax rate that applies to a US citizen applies to the case of a non-us domiciled person&#8217;s estate as well. <\/p>\n\n\n\n<p>An exemption of <strong>$60,000<\/strong> is available against the value of assets includable in the US taxable estate of an individual who was not US domiciled.<\/p>\n\n\n\n<p>Have you tried <a href=\"https:\/\/www.irstaxapp.com\/calculator-with-2020-estate-tax-rates\/\">estate tax calculator<\/a>?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_a_non-us_citizen_must_file_estate_tax_return\"><\/span>When  a non-us citizen  must file estate tax return ?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If the fair market value of the USA situated assets owned by the deceased <em>non-us citizen <\/em>but domiciled in USA exceeds $60,000, his executor  must file an estate tax return,\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f706na.pdf\" data-type=\"URL\" data-id=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f706na.pdf\" target=\"_blank\" rel=\"noopener\">Form 706-NA,<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Estate &amp; gift tax law applicable to a non-US citizens who live, work, or own property in the United States is different than a USA citizen.On death of a domoiciled non-us citizen , the US situs properties may have adverse tax consequences. Similarly, lifetime transfers by non-US citizens may also be subject to US gift [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4992,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/4987"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=4987"}],"version-history":[{"count":0,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/4987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/4992"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=4987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=4987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=4987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}