Inheritance and US based shares

Discussion in 'Wills, inheritances and gifts' started by Billy Baltic, Feb 13, 2018.

  1. Billy Baltic

    Billy Baltic Frequent Poster

    Through working for multinationals I have accumulated a basket of US based shares.

    I'm treating these as a long term investment and therefore may become some element of an inheritance.

    Is there an added complication from these being US shares in the case of inheritance (US inheritance tax) or are they treated the same as an Irish based asset?

    Thanks in advance
  2. SBarrett

    SBarrett Frequent Poster

    As far as I am aware, you can leave $60,000 tax free, the rest is subject to inheritance tax in the US.

    If you look into this a bit further, you will see that in a lot of cases, this is ignored in a lot of cases and the money is taken out of the US without paying the IRS the inheritance tax. So it will be an issue for your executors and whether they want to pay Uncle Sam or not.

  3. Marc

    Marc Frequent Poster

    Last edited: Feb 14, 2018
    If you are a non-resident foreign alien (Basically everyone outside the USA not a US citizen) and you hold more than $60,000 of US situs assets including stocks listed on the NYSE you could be liable to Federal Estate taxes at up to 40%.

    The problem is that most company shares are acquired in the sole name of the employee and acquired via a share save through a company like Schwab.

    This means that the shares are often in your name, acquired by you, and held in the USA.

    This is probably the worst outcome because you can’t argue that they are your spouses and to get them out of the US you need to flag it with the US custodian.

    If you are married and in a civil partnership there is no tax to pay in Ireland on first death.

    But the USA will seek to tax everything over $60,000 even if passing to a spouse or civil partner.

    This is a horrible situation since there is no tax in Ireland on transfers between spouses or civil partners there is nothing to credit against the tax paid so if CAT is also due then it results in double taxation.

    We certainly don’t want to be advocating an Irish solution to a US problem. Get some appropriate planning advice here.

    I have just attended a STEP conference in Dublin on this specific issue and there have been no changes to this position as a result of the latest tax changes in the USA.
    Last edited: Feb 14, 2018
  4. Billy Baltic

    Billy Baltic Frequent Poster

    Wow! I thought there might have been some tax and threshold but not this punitive.
    One of the posts above indicates that many people choose not to pay. Is this route even possible if the shares are held with a stock transfer company or will they take the tax at source?
  5. Gordon Gekko

    Gordon Gekko Frequent Poster

    If you hold the shares with a non-US institution, you can get around the US tax issue.