- April 19, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Investing in S&P 500 ETFs and Estate Taxes for Non-U.S. Persons
I am considering investing a substantial amount of money in S&P 500 ETFs, but I have concerns about potential estate taxes for non-U.S. persons. I have heard that there is a 40% estate tax that applies to U.S. assets, including stock issued by U.S. companies. Non-U.S. persons are subject to this tax, with an exemption amount of $60,000 allowing the first $60,000 of their U.S. assets to be transferred tax-free to their beneficiaries.
## Potential Impact of Estate Tax on S&P 500 ETFs
My understanding is that estate tax for non-U.S. persons extends to S&P 500 ETFs listed on U.S. stock exchanges. However, this tax does not apply to S&P 500 ETFs listed on non-U.S. stock exchanges, such as the London Stock Exchange, Italian Stock Exchange, or German Stock Exchanges.
## Tax Implications in Different Countries
I am interested in knowing if there are similar taxes to the U.S. Estate Tax in countries like England, Italy, or Germany if I choose to buy S&P 500 ETFs on stock exchanges in these countries. For instance, if I were to buy an S&P 500 ETF on the London Stock Exchange as a non-U.K. citizen residing in the EU (specifically Poland), would I be subject to any estate taxes?
## Seeking Advice on Tax-Efficient Investing
Considering the potential tax implications, I am looking for guidance on where to buy S&P 500 ETFs to minimize the impact of estate taxes. As a resident of Poland, I want to ensure that my investment decisions are tax-efficient and strategically chosen to optimize returns.
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AI Legalese Decoder can assist in deciphering complex legal language and regulations related to estate taxes for non-U.S. persons investing in S&P 500 ETFs. By utilizing this tool, I can gain a better understanding of the tax implications in different countries and make informed decisions on where to invest to minimize tax burdens effectively.
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What matters is the domicile of the ETF, not where you buy it. Many are domiciled in Ireland and they AFAIK don’t have any estate tax for foreigners.
All you nees to know:
https://www.bogleheads.org/wiki/Nonresident_alien_investors_and_Ireland_domiciled_ETFs
If you buy shares in any company through an Irish broker, you will be subject to Irish tax rules.
There’s also an official ban on European Union citizens buying US ETFs (You are a tax resident of Poland). But if you buy a US ETF through an option, no problem.
So you own a US ETF, but the inheritance tax is decided by Ireland.
Inheritance tax is decided based on the tax residency of the deceased! (Not on the domicile of an ETF)
(In principle estate tax could be due on US domiciled ETFs. But because as an European you can not buy these, i see that as a non-issue)
Depending on situation/amount to be resident in a country without inheritance tax could be beneficial!
https://en.m.wikipedia.org/wiki/List_of_countries_by_inheritance_tax_rates