In This Issue:

US ESTATE TAX UPDATE:CROSS BORDER PLANNING

U.S. Transfer Taxes

U.S. transfer taxes consist of three tax regimes: estate tax, gift tax and generation skipping transfer tax. For the purposes of this newsletter we will focus on the U.S. estate tax. The application of the transfer taxes to an individual depends if the individual is a U.S. citizen and/ or resident (collectively, a U.S. person) or a non-resident of the United States who is not a U.S. citizen (a non-resident alien).

Residency for U.S. transfer tax purposes is not determined in the same way as residency for U.S. income tax purposes. For U.S. transfer tax purposes, a resident is a person who is domiciled in the United States. A person acquires domicile in the United States by:

• being physically present in the United States, however briefly; and

• forming the intent to reside in the United States permanently.