A Quick-Reference Guide Based on Country of Residence
If you receive an inheritance as an American citizen living overseas, you’ll need to navigate any estate or inheritance taxes imposed by your country of residence. The following table provides insight to help you understand your potential tax liabilities.
| U.S. Citizen Beneficiary's* Country of Residence | Is there an inheritance tax on U.S. assets bequeathed by the U.S. decedent to me in the country where I live? | How long does it take before I am subject to inheritance tax in my country of residence** abroad? | Is there a bilateral U.S. estate tax or estate & gift tax treaty in place? | Is there an exemption or tax credit available by treaty or by other legal source? |
|---|---|---|---|---|
| Australia | None | N/A | Estate & Gift | Yes, by Estate & Gift Treaty; by tax code |
| Austria | None, but gift tax regime applies, requiring notice filing | Subject to notice filing requirement after 6 months residency | Estate & Gift | Yes, by Estate and Gift Treaty |
| Canada | None, but possible capital gains tax via deemed disposition | N/A | None | Yes, by U.S.-Canada Income Taxation Treaty |
| China P.R.C. | None | N/A | None | N/A |
| France | None, by treaty. Decedent’s domicile is determining factor | N/A | Estate & Gift | Yes, by Estate & Gift Tax Treaty |
| Germany | Yes | Earlier of domiciled in Germany or deemed domiciled (e.g 10 years residency) for inheritance tax purposes | Estate & Gift | Yes, by Estate & Gift Treaty |
| Hong Kong | None | N/A | None | N/A |
| Ireland | None, due to categorization as U.S. situs assets | N/A | Estate Only | Yes, by U.S.- Ireland Double Income Taxation Treaty (Capital Acquisitions Tax Exemption) |
| Italy | None. Situs of assets and decedent’s domicile are determining factors | N/A | Estate & Gift | Yes, by Estate and Inheritance Tax Treaty |
| Japan | Yes | If one has jusho1 in Japan or 10 years or more in Japan | Estate & Gift | Yes, by Estate & Gift Treaty |
| The Netherlands | None. Rules focus on domicile of decedent as determinative | N/A | Estate Only | Yes, by Estate Treaty |
| Singapore | None | N/A | None | N/A |
| Switzerland | Maybe. Depends on regional canton, degree of lineal proximity; does trigger wealth tax | When one has habitual residence (presumably after 90 days) | Estate | Yes, by U.S.-Switzerland Income Tax Treaty and by Swiss tax code |
| South Korea | None, but gift tax may apply if bringing assets into country | More than 5 years as resident in South Korea | None | Yes, by federal tax code and foreign tax credit regime |
| Spain | Yes, federal or regional inheritance tax applies | N/A | None | No |
| Sweden | None | N/A | None | N/A |
| United Kingdom | None | N/A | Estate & Gift | Yes, by Estate & Gift Treaty |
1. Jusho means “principal place of residence” (i.e., domicile by habitual residence)
* The table assumes that the heir beneficiary is a U.S. citizen and not also a citizen of his/her country of residence.
** Transfer tax residence is not the same as income tax residency; although, some countries use the income tax residency rules to determine if an heir is subject to death transfer taxes.
If you’re a U.S. expat navigating the challenges of a recent inheritance, Creative Planning International is here to help. We work with Americans abroad and cross-border families to help maximize their inheritance and avoid costly mistakes. We understand the complex interaction of multi-jurisdiction tax and regulatory regimes and take into account a wide range of country-specific factors as we help you maximize your inheritance and minimize the taxes you owe. For more information, request a meeting with a member of our team.
