Canadians who live in the United States may be regarded as U.S. residents for U.S. estate and gift tax purposes and taxed in the same manner as U.S. citizens.
For U.S. estate and gift tax purposes – unlike for income tax purposes – a resident is a person who is domiciled in the United States. A person acquires domicile by both:
Canadians who are domiciled in the U.S. will be liable for gift tax on the transfer of property during their lifetimes and are subject to U.S. estate tax on the value of their worldwide assets owned at the time of death. Those who are not domiciled in the United States will be subject to U.S. estate and gift tax on only certain U.S. assets. Our Estate tax update “U.S. estate tax exposure for Canadians (Revised edition, February 5, 2013)” provides details on how Canadian residents (who are not U.S. citizens) may be subject to U.S. estate tax if they die owning certain U.S assets. It is available at www.pwc.com/ca/estatetaxupdate.