It serves them right for being un-American!MangoMan wrote: To Frugal, and any other non-US persons considering opening a US brokerage account, or even using a non-US fiduciary to trade US-based mutual fund or ETFs: Read this carefully, and caveat emptor. I don't know how the IRS could enforce collection, but it is worth noting anyway.
How U.S. Estate Taxes Could Hammer Non-American ExpatsAmericans have enjoyed increasing relief from U.S. estate taxes as their qualifying limits have risen. But this isn’t the case for expats [sic] abroad. Those with stock and bond investments that trade on a U.S. exchange could be on the hook if their investments exceed just $60,000 USD. Decades ago, this was considered a lot of money. But not today. The exclusion rate hasn’t budged. And the tax could be hefty, starting at 18 percent and rising to 40 percent for accounts exceeding $1 million.
Here’s how it could work. Assume an Australian lives in Malaysia. She opens a brokerage account in Kuala Lumpur. She buys an iShares MSCI Malaysia stock market ETF. She may never have stepped on U.S. soil. She isn’t using a U.S. brokerage. But this ETF trades on the New York Stock Exchange. So if she accumulates more than $60,000 USD before falling out of a Petronas Towers window, her family might receive an unusual condolence letter from the IRS. “You owe us money,”? it might say.
(Note for the sarcasm-impaired:
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