U.S. Estate & Gift Tax Treaties

When it comes to the different tax treaties that the United States has entered into, oftentimes Taxpayers presume that it only applies to income tax -- but this is incorrect. In fact, the United States has entered into multiple different types of tax treaties, including estate and gift tax treaties with different countries across the globe.

One of the benefits of an estate and gift tax treaty is that it can minimize or eliminate duplicative estate or gift taxes that would occur if a Taxpayer had to pay estate/gift tax in both countries on the same assets. Let's go through the basics of estate and gift tax treaties and how they work.


With an estate/gift tax treaty, the benefit is that when a person has property/assets in multiple jurisdictions then those multiple jurisdictions will not have the opportunity to issue an estate tax on the same assets. Rather, the tax treaty will limit which country has an opportunity to tax the gift or estate based on the type of asset, where it is located -- and other
sourcing rules.


Here's an example of an estate tax treaty provision from Australia/US estate tax treaty:

"(1) Where a donor at the time of the gift was a citizen of the United States or domiciled in any part of the territory of either Contracting State, the situs at the time of the gift of rights and interests, legal or equitable, in or over the classes of property specified in this paragraph shall, for the purposes of the imposition of tax in respect of the gift by reason only of the situs of property being within the taxing State and for the purposes of the credit to be allowed under Article V of this Convention, be determined exclusively in accordance with the following rules:"

Subsequent to this paragraph in the treaty is a list of different types of property and assets -- and then it indicates how it will be sourced for estate tax purposes


Country ---> Estate or Gift Tax Treaty

Australia ---> Estate & Gift
Austria ---> Estate & Gift
Canada ---> Estate *
Denmark ---> Estate & Gift
Finland ---> Estate
France ---> Estate & Gift
Germany ---> Estate & Gift
Greece ---> Estate
Ireland ---> Estate
Italy ---> Estate
Japan ---> Estate & Gift
Netherlands ---> Estate
South Africa ---> Estate
Switzerland ---> Estate
United Kingdom ---> Estate & Gift


If you missed reporting overseas accounts, assets, gifts and/or income reporting in prior years, take a deep breath -- it is not as bad as some online scare-mongers want you to believe.

One important recommendation is to not take the quiet disclosure route (submitting to the IRS outside of the amnesty procedures). That is because if you get caught in a silent or quiet disclosure, it may lead to extensive fines and penalties. Instead, if you are inclined to get into compliance, consider one of the offshore voluntary tax amnesty programs listed below:

• Streamlined Domestic Offshore Procedures
• Streamlined Foreign Offshore Procedures
• Voluntary Disclosure Program
• Reasonable Cause
• DIIRSP (Modified on 11/2020)

Speak with Experienced Counsel

If you are out of compliance, you should speak with an experienced Attorney before making any affirmative representations or statements to the IRS.

IRS Voluntary Disclosure law is a specialty. In IRS offshore disclosure, experienced tax attorneys will have 20+ years of attorney experience, practice exclusively in International Tax Law, have earned a Board-Certification -- and advanced credentials such as an LL.M. and dual-licenses in tax and law.

ABOUT THE AUTHOR: Golding & Golding
Our Managing Partner, Sean M. Golding, is a 20+year Attorney and Board-Certified Tax Law Specialist (a distinction earned by less than 1% of attorneys nationwide). His team specializes exclusively in IRS Offshore & Voluntary Disclosure matters. They have assisted thousands of clients nationwide and across the globe.

Copyright Golding & Golding, Attorneys at Law

Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws and.how they may affect a case. For specific technical or legal advice on the information provided and related topics, please contact the author.

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