This article will discuss US estate taxes for non-Americans living overseas.
No matter where you are, you must be interested in US stocks, ETFs or funds when it comes to growing your assets.
However, there are two problems with this: US withholding tax, and US estate tax.
Can we avoid or mitigate these risks while enjoying the benefits of investing in US investments? How?
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).
This article first appeared on adamfayed.com. Some of the facts might have changed since we wrote it, and nothing written here is formal advice.
For updated guidance, please contact me.
For those that prefer visual content, the video below explain the key points associated with this article.
US estate and withdrawal taxes shouldn’t be overlooked if you have invested in US stocks, funds or ETFs or have acquired US stock options.
This article isn’t formal tax advice, but I will speak about some basic rules of thumb and a huge mistake many people make.
Regarding basic rules of thumb, your country of residency might sometimes tax your gains from the US, just like all other gains.
This isn’t relevant if you live in a zero percent dividend and capital gains tax country, like Qatar or the UAE, or if you purchase US stocks in tax-free accounts like UK ISAs, but it is relevant in many places.
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However, I presume the question is about US taxes from the point of view of taxes from their side.
There are two things to consider here:
US estate taxes for non-Americans are a huge banana skin that is avoidable.
So, how can you avoid this?
The easiest way is to invest in US assets domiciled on other exchanges.
For example, buy the S&P500 ETF or index fund domiciled on the London or Irish Stock Exchanges.
You can do this in USD, Euros or Pounds.
It won’t affect your returns.
It will just reduce your risks.
Of course, if you are relatively wealthy, you can also consider trusts that own assets and other financial planning tools.
Source: Adam Fayed's Quora and YouTube channel.
