US Shareholders beware

Did you know that the United States could impose a 40% estate tax rate on U.S. assets above a $60,000 exemption threshold on assets of the deceased non-residents? Foreign estates become subject to U.S. estate taxation with respect to their U.S.-situated assets. This could apply to your company stock if it’s in a U.S. company, regardless of where the custodian may be situated.

This week our Senior Financial Consultant, Deepak Singh, explores what this could mean for you as a Singapore resident, and what you can consider to mitigate your exposure to U.S. estate tax.

What exactly is the U.S. Estate Tax?

Do you know if you hold U.S. Stocks / Shares in excess of US$60,000 in value. As a non-resident non-American, citizen you could be liable for U.S. Estate Tax upon your death. This could mean that if you’re currently working for Google, for example, and have employee stock, then if this is valued at greater than US$60,000, this could attract to estate taxes in the United States.  

How does this affect me?

Any U.S. listed shares or stocks, regardless of where the custodian may be based that are valued in excess of US$60,000 could attract an estate tax of a whopping 40%. Let’s consider a simple example:

Let’s assume that you work for Apple, and as Apple is a U.S. company, you have been earning shares as part of your remuneration, which have currently reached a value US$500, 000. If you were to pass away with this current value in place, then this could attract a tax as follows:

US$500,000 – US$60,000 = 440,000 x 40% = US$176,000 tax bill.

Who does it effect?

Any U.S. shareholder who is not a resident or a U.S. citizen. This affects expats in Singapore and all over the world, including those who are currently working for a U.S. company and earning shares as part of their remuneration, as well as those who are thinking of investing in U.S. shares.

What do I do about it?

We can sit down with you to explore what your options may look like to minimise your exposure to U.S. estate taxes. One such option that we can consider it to transfer your shares / stocks In-Specie to an offshore investment account which could in fact take them outside the American Estate tax liability.

Deepak Singh is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3

To book a complimentary meeting, and explore how we can assist you, please use the following details.

✉        deepak.singh@admin.gfcadvice.com
☜         https://calendly.com/deepakadvisory/introductory-meeting-our-office

General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.

*Please note that Deepak Singh is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.