As Americans recover from their 4th of July parties, it is indeed time to consider the tax cost and consequence for aliens investing with Uncle Sam
Yes, South Africans are aliens. President Trump may or may not have referred to people from South Africa as living in a s’hole country, who am I to say!
The IRS and USA tax laws most certainly labels us South Africans without an USA passport or green card as non-resident aliens.
We may not be from Mars nor Jupiter yet we are, upon death to pay FET (Federal Estate Tax) on our USA situs assets.
FET’s maximum rate is 40% and there is no spousal roll over. The exempt amount is a mere $60 000. No further SA estate duty is payable on the said USA assets, as there is a treaty in place
No spousal roll-over you ask? Yes, no roll over and the take home is that USA stock and cash held by you USA stock broker, should NOT be bequeathed to your spouse!
No, not to the offshore trust either as your wife will be taxed, upon her death assuming she is the surviving spouse, on the USA situs assets held within the offshore trust.
Who then, should be nominated as the named legatee in your will, as the person to inherit eBay, Facebook and all other USA equities?
Indeed an interesting question and one best addressed during a one-on-one meeting, with your SA accountant, duly present.
Need an appointment? Feel free to make contact on