US estate tax on US shares held by non-residents

The number that surprises people

A US citizen dying in 2026 can pass on $15,000,000 before federal estate tax applies. A non-US citizen who is not US-domiciled gets a unified credit of $13,000, which shelters exactly $60,000 of US-situs assets.

That is not a typo, and the threshold has not moved with inflation for decades. Above it, the Form 706 Table A schedule applies, climbing from 18 % to 40 %.

An expat in Singapore or Dubai with a $400,000 position in a US-listed S&P 500 ETF is looking at a six-figure liability that no account statement mentions.

What counts as US-situs

The rule that catches people is where the asset is, not where the account is.

Exposed:

• Shares in US corporations — Apple, Microsoft, Berkshire — regardless of the broker’s country. IRC § 2101 says so explicitly: still US-situs when the certificates are held abroad or registered to a nominee.
• US-domiciled ETFs and mutual funds — VOO, SPY, VTI, QQQ.
• US real property, and tangible property physically in the US.

Not exposed:

• Irish-domiciled UCITS — CSPX, VUSA, VWRA — even holding only US companies.
• US bank deposits not connected with a US trade or business.
• Most US corporate and government bonds qualifying as portfolio debt.

The line runs through the wrapper, not the underlying. CSPX and SPY track the same index and hold the same companies; only one of them puts the estate in front of the IRS.

Why Irish UCITS keep coming up

For a non-US investor outside a US estate tax treaty, the Irish-domiciled UCITS is the standard answer to two problems at once:

The 15 % figure comes from the Ireland–US treaty and is suffered inside the fund; you never see it, but you pay it. Against 30 % on a US-domiciled fund for a resident of a country with no US income tax treaty, that is half the drag — and the estate exposure disappears entirely.

Irish UCITS carry their own costs: slightly higher expense ratios, wider spreads on some listings, and — for US citizens abroad — the PFIC regime, which turns the same fund into a punitive tax problem in the opposite direction. The right structure depends on which passport you hold, not only where you live.

The part that hurts even below the threshold

Filing is required more often than tax is owed. An estate with US-situs assets above $60,000 files Form 706-NA, generally within nine months of death.

Until that is done and the tax paid, a US broker or transfer agent can decline to release the assets. Heirs who need liquidity — for funeral costs, for a mortgage — find the account frozen behind a US tax filing in a language they may not read, prepared by a professional they have to find and pay. The paperwork problem becomes a cash-flow problem in the worst possible week.

Estate tax treaties can raise the exemption toward the US-citizen amount, prorated by the US share of worldwide assets. Fewer than twenty countries have one. Singapore and the UAE do not — the two places where this most often matters for the expats concerned.

What to check this week

1. List every US-situs holding across every broker, in one place. Exposure is aggregate; three accounts of $30,000 each are not three exemptions.
2. Check the domicile of each ETF, not its listing. An ISIN starting IE is Irish; US is not.
3. Check whether your country has a US estate tax treaty before assuming any relief.
4. If you hold a US passport, take PFIC advice before switching to Irish funds — the answer inverts.
5. Write down where the account details are. The largest avoidable cost here is heirs who do not know an account exists, or cannot prove what was paid for what.

Everything above is an estimate of exposure, not advice. Estate planning across two jurisdictions is one of the places where a few hundred dollars of professional time is straightforwardly worth it.