Inheritance tax on U.S shares

J

jacques28

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Hi all,

My elderly father has shares currently worth $80k of which I will be the sole recipient.

Would I be liable for tax in the States as well as Ireland and, if so, how is the U.S tax rate calculated?

I would exceed the Irish tax-free threshold due to other assets so would be liable for the full amount on the $80k here. A double tax would really hammer me but I would at least rather be forewarned.

Any help much appreciated.
 
jacques28 said:
Hi all,

My elderly father has shares currently worth $80k of which I will be the sole recipient.

Would I be liable for tax in the States as well as Ireland and, if so, how is the U.S tax rate calculated?

I would exceed the Irish tax-free threshold due to other assets so would be liable for the full amount on the $80k here. A double tax would really hammer me but I would at least rather be forewarned.

Any help much appreciated.
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In a word yes, but reading this forum there seems to be difference of opinions on whether the IRS would persue the liability.

Its fairly heafty too, I believe its almost 40% , but again others will be more knowledgeable on the rate residency etc.

Perhaps selling the shares is certainly one way of definitely not paying US tax.

The tax part of your question is something I'd like to understand so I'll piggyback on your OP if permitted.
 
Thanks for the reply.

So I would pay, say 40% on the $80k and then be due to pay another 33% on the the rest to revenue which would leave me with very little.

Does anyone know the tax rate and also if there is a tax-free threshold in the U.S before it kicks in.

Seems like selling the shares is definitely an option for people in my situation to consider.
 
I assume they are all US shares and you or your father have no connection to the US?

you'd get a credit in Ireland for the 40% deducted so additional leakage is really only 7%, when compared to 33% on other Irish asset transfers.

There is probably no point in selling the shares if its crystalises a large CGT bill now. If CAT would apply you could maybe look at gifting them to you now. All depends on what you wish to do with them.
 
There’s a $60k exemption.

Are the shares held in Ireland?

If so, just ignore any US exposure.

It’s actually a sliding scale of rates that gets to 40% but is only 18-20% on a taxable amount of $20,000 (i.e. $80,000 less $60,000).

There wouldn’t be double taxation (as in, you’d get credit in Ireland for any US tax paid.

But of these shares are held outside the US, I’d just ignore the tiny US tax exposure.

I’m guessing the gains on the shares are a disincentive to sell them now? Although those gains aren’t as much of an issue after the last few weeks!
 
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Thanks for the answers guys.

No, neither my father or I have any connection to the U.S and the shares are held with Degiro.

So if I've understood, there really wouldn't be much difference if they were Irish shares. 20% on the amount is only due above the $60k.

So 20% of $20k= 4k, which I can get a credit for and then pay the normal Irish rate of 33% on the 80k. Is this right?
 
What is the liability for an Irish tax payer who purchased American shares through for example Davy?
 
Gordon Gekko said:
The same, but it becomes self-assessment rather than tax at source.
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Gordon would you mind giving your view on this scenario....
My wife gets RSUs and TRSUs as part of her long term incentive, if ,god forbid, she died all her shares would automatically vest and the proceeds would go into her fidelity stock account held somewhere in the US.

The amounts would be substantial how would the 40% estate tax be administered?
Shes tax resident here obviously and I am her sole beneficiary and her sister is executor of her will.

If you have 5 mins.
 
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