does a foreign resident pay estate taxes on us financial accounts?

estate taxes nonresident inheritance taxes

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1. As a nonresident, you do have to pay estate tax on us holding such as Stock holdings of U.S. Companies, American real estate, tangible personal property, and securities of U.S. companies. Items exempt from U.S. estate taxation are any securities that generate portfolio interest, bank accounts not used in connection with a trade or business in the U.S., and insurance proceeds. The tricky part is, certain U.S. treaty countries are provided more favorable taxation in that it limits what type of assets are actually considered subject to U.S. estate tax. You will need to fill out a form 706NA, here is a link to both the form and instructions. Form: http://www.irs.gov/pub/irs-pdf/f706na.pdf Instructions: http://www.irs.gov/pub/irs-pdf/i706na.pdf
2. It is highly dependant upon your country of residence. Assuming you are living in a non-treaty country, inheritance tax begins on US assets over $60,000. If you are leaving everything to a spouse, a QDOT clause in your will may allow you to postpone the tax to a far-off future date. Seek expert advice in your will planning for whether or not such a clause is appropriate from a US lawyer who handles estates of Nonresident Aliens on a regular basis.