US Estate and Gift Tax

The US levies both Estate and Gift taxes. This means that that:

1. As a US person, your estate (subject to certain exemptions) will be taxed on your death. This can be a complicating factor for US persons married to non-US spouses.

2. As a US person, you are limited in how much you can “gift” to any one person on an annual basis.

The stated objective of the Estate tax is to make it difficult for families to accumulate wealth and pass that wealth to the next generation. For US persons, the expression, “You can’t take it with you” has very real meaning. Now, before you get overly excited, please note that Estate and Gift taxes are subject to certain exemptions. That said, if you are married to a non-US spouse, the Estate Tax can be especially damaging.

What about “Non-US Persons”?

The estate of a non-US persons is subject to the US Estate tax, to the extent that the estate holds US property. This is one more thing to remember, if you are considering buying an investment property in the U.S.

Gift and Estate tax is triggered by “domicile” and not “residence”.

That’s the basic principle, but for further reading …

U.S. Gift tax and returns



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