>> So as a UK resident investing in individual US shares as a named individual through say interactive brokers and having filled out the W8BEN optimiseaccountants.co.uk - Americans US...

>> I'm liable for this 40% estate tax or not?

> You are liable.

Hello. I don't agree. I believe he is not liable (to US estate tax) except in rather extreme circumstances.

I'm not a lawyer or a tax consultant, and OP, THIS IS NOT TAX ADVICE OR LEGAL ADVICE.

But I've looked into this before for myself, and these are my findings:

1) Firstly, and as a very minor technicality, it's an estate tax, so liability is for the estate, not 'him'.

2) Residence is not the key issue. Citizenship and domicile are the key issues in US & UK estate taxes.

For example, a US citizen who is UK resident and has domicile somewhere else, may have a different set of concerns to a UK domicile UK resident UK citizen.

3) uniset.ca: US-UK Estate and Gift Tax Treaty (1980).

This treaty determines estate taxation of UK domiciled individuals holding US domiciled assets.

4) Generally, for an ordinary UK citizen, this page written by a US CPA who leads an international tax department, summarises how things are:

"Individuals domiciled in the U.K. have significant advantages over residents of other countries due to the favorable provisions contained in the estate tax treaty between the U.S. and the U.K., which has been in effect since November 11, 1979. Article 8, Paragraph 5 of the treaty provides that the estate tax imposed in the U.S. on a domiciliary of the U.K. shall be limited to the estate tax that would have been imposed if the decedent had been domiciled in the U.S. immediately before his death. For decedents dying in 2022, this means that if the worldwide estate of the U.K. resident was valued at $12,060,000 or less at date of death, the U.S. estate tax would be zero, regardless of the value of the U.S. assets in relation to the value of the assets outside of the U.S. Even if no tax is due, the filing of a U.S. estate tax return is required if the value of the U.S. assets exceed $60,000 at date of death."

That paragraph corresponds with everything I have ever read on this topic re: UK domiciled individuals holding US domiciled assets.

In conclusion, and as I personally understand it (and again, this is NOT tax advice, this is NOT legal advice):

1. The estate of a UK domicile individual with under $60000 in US domicile assets (directly held!), has nothing to worry.

2. The estate of a UK domicile individual holding US domicile assets indirectly (e.g. via an Irish ETF), has nothing to worry about.

3. The estate of a UK domicile individual holding US domicile assets directly, worth over $60000, will have to file a US estate tax return, but can claim rights under the treaty reducing tax to zero.

4. The estate of a UK domicile individual holding US domicile assets directly, worth $12,060,000 or more, will have to pay US estate taxes as well as filing a US estate tax return.

I encourage the original poster, if they have very substantial savings directly held and which are domiciled in the USA, to seek professional advice from an international UK/US tax specialist to confirm their situation.

Hope this is useful / of interest to someone

lux