An estate can have US estate tax reporting obligations even where the deceased was not a US citizen or resident, a specialist in cross-border shares has warned.
UK firm Share Data says estates that include shares in US companies may be required to submit documents to the IRS or risk unnecessary delays.
“If the deceased owned shares in US companies, the estate may be required to submit IRS form 706-NA before those assets can be transferred or sold”, Share Data explained.
“Many executors only become aware of this requirement after being contacted by a transfer agent or financial institution, which can lead to unexpected delays if the necessary documentation has not been prepared.”
Form 706-NA is a United States estate tax return used when a non-US citizen and non-US resident dies owning certain assets situated in the United States.
It enables the IRS to determine whether US estate tax is payable before assets such as shares or securities can be released.
According to Share Data, Form 706-NA may need to be considered if the deceased was not a US citizen or resident; the estate includes shares in US companies; the value of US-situs assets exceeds the relevant IRS threshold; a transfer agent has requested Form 706-NA or IRS tax clearance before releasing assets.
“Every estate is different, and determining whether the filing is required depends on the assets involved and the individual circumstances”, the company explained.
Share Data works with US tax professionals to support estates with US assets, including IRS-compliant share valuations and coordinating the documentation needed for US share transfers.
