Estate Tax on US Shares

What Is the US Estate Tax Issue for Non-US Investors?

If you are not a US citizen or Green Card holder but own shares in US companies, those assets may be subject to US estate tax on death. This applies even if you live permanently outside the United States and hold the investments through an overseas platform.

This guidance reflects current US federal estate tax rules applicable to non-US persons and is intended as standing regulatory information rather than time-sensitive commentary.

Who Is Affected by US Estate Tax?

• Dubai and GCC residents who are non-US citizens
• Investors holding US-listed shares or ETFs
• Employees with US company share or stock award schemes
• Individuals using European or offshore custody platforms

What Are US Situs Assets?

US shares are classified as US situs assets. This means they are considered US-based for estate tax purposes, regardless of where the investor lives or where the assets are held.

How Does US Estate Tax Work?

• When it applies: On death, not during your lifetime
• Tax rate: Up to 40%
• Exemption: USD 60,000 for non-US persons
• Scope: Applies even with no other US connection

Why This Is a Major Risk for Expats

• US shares are common in global portfolios
• Employee share schemes can grow significantly over time
• The tax exposure is often discovered too late
• Beneficiaries may face delays and IRS involvement

How Can US Estate Tax Be Mitigated?

• Restructuring: US shares can often be moved into more suitable holding vehicles
• In-specie transfers: Assets may be transferred without selling
• Estate planning structures: Designed to remove US situs exposure
• Control retained: You remain in control during your lifetime

US Estate Tax Treaties

• The US has estate tax treaties with a limited number of countries
• Treaty protection depends on nationality and domicile
• Many GCC residents do not automatically qualify
• Individual analysis is essential

Holding US Shares: Direct vs Structured

Feature	Direct Ownership	Structured Ownership
US Estate Tax Exposure	Yes	Potentially Removed
Need to Sell Assets	No	No (in many cases)
Lifetime Control	Yes	Yes
Beneficiary Outcome	Potential Tax Loss	Full Value Preserved

Common Questions

• Does this apply if my broker is outside the US? Yes.
• Is the tax payable while I am alive? No, it applies on death.
• Do employee share schemes count? Yes.
• Can this be fixed without selling? Often, yes.

Note: This information is provided for general guidance only and does not constitute financial or tax advice.

This page is maintained as a reference resource on US estate tax considerations for non-US residents and is periodically reviewed to reflect current US federal estate tax rules.

Last reviewed: January 2026

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About the author

This article was written by Patrick Macdonald ACSI, an international financial adviser specialising in cross-border estate and succession planning for expatriates living in the UAE and wider GCC.

Patrick advises non-US residents on the implications of holding US situs assets, including US-listed shares and employee stock schemes, with specific focus on US federal estate tax exposure.

His work centres on complex cross-border planning where US, UK, and local tax and regulatory regimes intersect.