US Death Taxes for Foreign Investors

[Oxx]

I hadn't realised that my investments in American equities and ETFs were potentially subject to US death taxes above US$60,000.  To quote an example "Assume you’re a British investor living in Dubai.  You die with more than $60,000 invested in U.S. stocks.  In such a case, Uncle Sam might take up to 40 percent of the pie."

 

https://www.internaxx.com/expat-investor/smart-investing/little-known-mistake-many-expats-make

 

I'm a little shocked and will now be capping my direct US investments.

 

Be warned!

[Thailand J]

IRS Form 5173. Do you know what it is?

If your broker strictly follows US laws, your heir will  need to get a “Transfer Certificate” before the shares can be passed down or your money will remain at the brokerage firm. I know Charles Schwab wants to have the Transfer Certificate for both non-US citizens, and also for US citizens overseas. Having  a will and name an executor who is in US may avoid this.

A Transfer certificate takes many months to get and the paperwork is tedious.

For assets  over US$60,000, Form 706NA needs to be submitted. I got a headache just looking at the form.

Under US$60,000 :

“please submit the following items to the Department of the Treasury, Department of the Treasury, Internal Revenue Service, STOP 824G, Cincinnati, OH 45999.

1. Copies of the decedent's last will and testament along with any codicils. Please include English translations if in another language.

2. One copy of each death tax or inheritance tax return and any corrective statements filed with taxing authorities other than the United States. Please include English translations if in another language.

3. One copy of the decedent's death certificate. Please include English translation if in another language.

4. An affidavit, which is a written declaration made under oath before a notary public or other comparable local official. The affidavit may be in the form of a letter. It must be signed by the executor, administrator, or other personal representative of the estate and include all of the following items:

1. The decedent's date and country of birth.

2. The date of the decedent's naturalization as a United States citizen, or a statement that the decedent had never become a naturalized U.S. citizen.

3. A list of all the decedent's United States assets in which the decedent had any interest at the date of death (whatever may be their legal situs for U.S. estate tax purposes) and their values at the decedent's date of death. For any U.S. bank or investment account, please include the account number.

4. The decedent's citizenship and residence at the date of death.

5. Whether any of the decedent's U.S. bank accounts were used in connection with a trade or business in the United States.”

 

https://www.irs.gov/businesses/small-businesses-self-employed/transfer-certificate-filing-requirements-for-non-us-citizens

https://www.irs.gov/businesses/small-businesses-self-employed/transfer-certificate-filing-requirements-for-us-citizens

http://international.schwab.com/public/file/P-6133620/US_Tax_Est_Disclosure_to_NonUS.pdf