Scotia Wealth Management
January 26th, 2026
U.S. estate tax planning considerations for Canadians owning U.S. assets
As a Canadian resident, you may own U.S. assets, such as U.S. real property or investments in U.S. companies. Depending on certain conditions, you may be subject to U.S. estate tax upon your death. Understanding the implications of this tax and potential tax planning strategies to minimize the impact on your estate is important.
This article provides an overview of the U.S. federal estate and gift tax, its implications for Canadians not considered U.S. persons for U.S. estate tax purposes, and common planning considerations for you to review and discuss with your cross-border tax and legal advisors before implementing. Notably, certain states in the U.S. also levy estate or inheritance tax on Canadians who own property within their borders. This article only addresses U.S. federal estate and gift tax planning considerations.
Understanding U.S. estate tax
The U.S. imposes federal estate tax at graduated rates, ranging from 18% to 40%, based on the value of your taxable estate upon your death. U.S. persons are subject to U.S. estate tax based on their worldwide estate, but non-U.S. persons, including non-resident aliens (i.e., Canadians who are not U.S. persons), may also be subject to U.S. estate tax if the value of their U.S. situs assets exceed USD $60,000. Notably, U.S. estate tax only applies to the value of U.S. situs assets for Canadians. For the purposes of U.S. estate and gift tax, the term “U.S. person” refers to a U.S. citizen or a person domiciled in the U.S.
