Article
Understanding U.S. gift and estate tax issues for non-U.S.. Persons with U.S. assets
Oct. 29, 2025 · Authored by Brittain Cunningham, Stuart Myhill
As the world experiences significant generational transfer of wealth from the Baby Boomer generation to younger cohorts such as Gen X, Millennials, and Gen Z, cross-border estate planning has become increasingly important.
Many non-U.S. persons now hold significant financial, real estate, and physical property located in the United States, making U.S. gift and estate tax rules a critical consideration in their wealth transfer strategies.
Explore key tax considerations for non-U.S. individuals who own U.S.-situated assets or have U.S. beneficiaries, including critical concepts, planning opportunities, and compliance obligations with the following insights.
What causes U.S. gift and estate tax exposure for non-U.S.. Persons?
The U.S. tax system imposes estate and gift taxes on transfers of property by individuals. For non-citizen non-U.S. U.S. domiciled persons, only assets considered U.S. situs are subject to U.S. estate and gift tax. This contrasts with U.S. citizens or U.S. domiciled individuals, whose worldwide assets are subject to these taxes.
Following are some key definitions.
U.S. domicile
A complex, fact-specific determination based on an individual’s residence, intent to remain, and other ties to the U.S. U.S. citizens and U.S. domiciliaries are subject to estate and gift tax on worldwide assets.
Non-U.S.. Domicile
Individuals who aren’t U.S. citizens and who don’t meet the domicile criteria are taxed only on U.S. situs assets.
U.S. situs assets
Assets considered located in or connected to the U.S. under U.S. tax rules. U.S. situs assets include U.S. real estate, tangible personal property physically located in the U.S., certain intangible assets, and U.S. corporate stock and other financial assets.
Estate and gift tax exemption thresholds: Stark differences
One of the most significant distinctions between U.S. domiciliaries and non-U.S. domiciliaries is the amount of exemption available.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.