Things About Foreign Estate Tax For United States Citizens Staying Overseas

Do you know anything about Foreign Estate Tax for United States Citizens who stay overseas? Do you want to know all the details related to Estate planning? If you wish to get all the insights related to Foreign Estate Tax, then you have come to the best place at Stay tuned and continue to read Foreign Estate Tax and get more updates at Click here for more details related to Foreign Estate tax for United States Citizens staying overseas.

United States estate tax is assessed on the value of individual properties at the time she or he passes. The government of the United States might only charge the tax on properties whose value is more than $11.7 million, as per reports in 2021. If the estate value is more than these amounts for the applicable years, Form 706 or a foreign estate tax return should be filed with your United States expat income taxes for the planning of estates.

Are Foreign Assets Subject to Estate Taxes?

You may exclude more than $11.7 million for the 2021 of your estate. Federal estate rates of income taxes are progressive and range from 18 to 40 percent in the year 2021. Few states also impose taxes on properties.

Also, it is not only an element used to consider property liability on expat taxes in the United States. When speaking about foreign properties being subject to estate tax, one necessary thing to note here is that estate taxes and gifts are unified. Every year, an individual may gift more than $15,000 to every person free of income taxes. Apart from this annual exclusion, you may select to pay income taxes on the excess or even include the excessive amount in the sheltered estate. Also, gifting may even increase or decrease the value of the estate, and it is a necessary part of property planning.

FTC or Foreign Tax Credits for Estates

Similar to FTC or foreign tax credit we are used to seeing on our United States annual expat taxes, there is an FTC or foreign tax credit for estate taxes too. As a resident of a foreign nation, your property was taxed at the local level. These taxes paid may be used as a credit on the United States expat taxes. You must keep this in mind for the planning of property taxes.

Your Non-Resident Alien Spouse and US Expat taxes

What if your partner is not a resident of the United States or a citizen? How may she or he takes care of the United States expat income taxes related to the estate? This is the big question, and it is best that you plan ahead! A non-resident alien partner does not become eligible for the exemption of the surviving partner, and the United States citizen partner’s estate may be taxed upon their death. All of the United States assets owned by the US partner may get passed to the non-US partner at death and also be taxed with only a less exemption. The best thing is that any asset owned by a United States partner outside of the United States might not be subjected to the United States expat taxes.

One is to shift properties outside of the United States so that they may not be subjected to United States assets tax upon the death of the owner. There are many strategies to assist in counteracting these regulations and aid in your planning of properties. Also, it will also build FBAR reporting needs and might potentially prompt the Internal Revenue Service to start questioning your motives. The income from the foreign accounts might be taxable in the United States and is reported on the US expat taxes.

Although staying in the United States is needed, this may aid the partner to become eligible for the surviving exemption of spouse and inherit more than ten million dollars in tax-free properties. Another asset planning strategy is for the non-resident partner to apply for citizenship in the United States. It is quite an unpredictable strategy, as citizenship is not at all guaranteed, and several expats don’t want to come back to the United States.

A third alternative for the planning of assets is to shift the properties owned by the married couple into the partner’s name of a non-resident alien. There are many drawbacks to the strategy such as the taxation duties in the resident nation, the unknown of who may die first, and the probability of divorce. Also, this is the best thing to decrease your United States expat income taxes linked with the properties of the United States citizen partner.

Asset Planning for US Citizens Living Overseas: Renouncing Your Citizenship of the United States

In previous years, several high-wealth persons began the trend of renouncing their United States citizenship or shifting overseas to the planning of assets for United States citizens staying overseas. These huge gifts mean a huge burden on US expat income taxes. The trend has gained popularity, and the IRS has planned to put policies in place to prevent such as the exit tax. The exit income tax considers that former citizen of the United States is selling all of their properties across the globe and taxes the complete value or amount of the properties at either capital gains or ordinary rates varying on the asset type.

Also, renouncing citizenship to eliminate taxation is not at all advised. If you decide to shift overseas and renounce your citizenship in the United States, there is a chance that you may have to stay outside of the country United States for more than ten years before becoming exempt from United States expat of income taxes.

Foreign Estate Tax or FET Planning for US Citizens Staying overseas

As stated in the above illustration, high-wealth people run the risk of their properties having significant tax liability of United States expat. We will learn more about various estate planning of taxes strategies below for property planning for United States citizens staying overseas. If you are planning to implement one of these things, you must consult tax professionals at for more help related to your individual circumstances and your foreign estate tax.

You must build trust:

Trusts is among the most common thing to decrease liabilities of property taxes. There is a wide range of trusts that might be built that includes charitable remainder trusts, Qualified Personal Residence Trusts, and Irrevocable Life Insurance Trusts. Each one of these has various disadvantages and advantages. So, search for the better one for your case before building one.

Make a commitment to the love of your life:

Getting married is the easiest form of asset tax planning thing. If you marry a citizen or resident of the United States of America, you might become eligible for up to $22.8 million or more than that in federal asset tax exemptions for the year 2021. If you marry an alien who is a non-resident of the United States, then you have a choice, as stated above.

Spend, Spend and Spend:

Another best method to decrease the value of the property is to spend the money before a person dies. It looks straightforward and simple, and it does. Also, you never understand how long you may stay. Also, you might have to be a little careful about how you spend it as real property such as buildings, and land, might be included in the value of your assets.

Be Generous in Gifting Before Death:

As stated briefly above and thoroughly in the Gift taxes blog, every citizen of the United States might gift up to $15,000 every year tax-free. By taking benefit of this, individuals may decrease the number of their properties significantly if they plan in advance. Also, you must make your family and friends safe and happy at a well-attended wake.

Do You Have Any Questions About United States Estates and Expat Taxes?

At we have a complete series that details the taxes on US expat. If you have any questions or may wish to know about our foreign estate taxes or expat tax services, then you can connect with us anytime. At, we have the best and most talented team of expat professionals who is there to help you in the best possible way. 

You can connect with our talented experts anytime and discuss everything with them. They will guide you properly and ensure to resolve all your queries. Our experts are highly educated and have rich years of experience, so you don’t have to worry about anything. They are on their toes to help our clients so that they can relax and do their work while our tax experts at manage all our client work effectively. If you think that you want some help, feel free to connect with any time. We at believe in offering the best customer experience, as our clients are our biggest asset. So, don’t think much and connect with us now at for any type of tax assistance, we are always ready to help you!