Estate Tax Update

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U.S. estate tax exposure for U.S. citizens living in Canada (Revised edition, February 7, 2013)

If you are a U.S. citizen living in Canada, you may be subject to both the Canadian and U.S. tax regimes at your death. All dollar amounts are in U.S. currency unless otherwise noted.

As a Canadian resident, you are subject to Canadian income tax at death. As a U.S. citizen, you are subject to U.S. estate tax on the fair market value of your worldwide estate at the time of your death. Your worldwide estate includes all property owned at death — regardless of where the property is located — even:

• life insurance proceeds, if you own the policy or if the proceeds are payable to your estate;
• certain property transferred within three years of death;
• registered plans (e.g., registered pension plans, registered retirement savings plans and registered retirement income funds);
• certain trust interests; and
• stock options.