If you are paid in shares, Amazon, Google, Microsoft, Meta or any other US-listed stock, or you simply hold US shares in a brokerage account, you may be quietly building up exposure to a US tax that very few people abroad have ever been warned about. The United States charges estate tax of up to 40% on US-situated assets owned by non-Americans, and the exemption is a startling $60,000. A network of treaties rescues residents of a small number of countries from this trap, but only around sixteen jurisdictions have one, and most of the world, including the entire Gulf, is not on the list. This guide explains why your US shares and vested stock awards are caught, why a treaty may not be there to save you, and how the exposure can be managed. It is a starting point for understanding your position, not personal tax advice.
The United States taxes the estates of non-Americans on their US-situated assets, at rates rising to 40%, with an exemption of just $60,000. That figure is not a typo and it has not moved since 1976: the $60,000 non-resident exemption remains unchanged, even as the exemption for US citizens sits at around $15 million (approximately $15.2 to $15.5 million in 2026). For someone abroad, this means a surprisingly modest holding of US assets can create a real liability. A non-American dying with $1,000,000 of US shares could face US estate tax in the region of $340,000 to $376,000 once the graduated rates are applied. The tax is determined by where the asset is situated and by your domicile, your permanent home for legal purposes, not by where you live day to day or your income tax residence, so it reaches people who have never set foot in the US in years. It is one of the largest and least understood risks for internationally mobile professionals, precisely because so few are ever told it exists.
This is the part that matters most for anyone paid in equity. Shares in US corporations are US-situated assets, and that is true regardless of how you came to own them or where they are held. Vested shares you received as part of your compensation, restricted stock units in Amazon, Alphabet, Microsoft, Meta or any other US-listed employer, are US-situated the moment they are yours. It makes no difference that you earned them through employment rather than buying them, nor that they sit in an employer's nominated brokerage platform outside the US. For a highly paid professional who has accumulated stock awards over several years, the exposure can build to a very significant sum without any deliberate investment decision ever being made. Many people in exactly this position, senior employees of US tech and finance firms living in Dubai, Singapore or elsewhere, are carrying substantial US estate tax exposure without realising it, simply because their pay package included US shares.
The US has estate or gift tax treaties with only around sixteen jurisdictions. The list is short: broadly Australia, Austria, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, Norway, South Africa, Switzerland and the United Kingdom. Where a treaty exists, a resident or domiciliary of that country can often claim a far larger effective exemption, greatly reducing or removing the trap. But if your country of residence and domicile is not on that list, there is no treaty relief at all, and you are left with the bare $60,000 exemption. Critically for a large part of the internationally mobile world, the United Arab Emirates and the rest of the Gulf have no estate tax treaty with the US, and neither do many other popular expat destinations. So the reassuring assumption that there is usually a treaty, which a British person might rely on, simply does not apply to most expats. For them, the trap is not softened, it is fully live.
A short, complimentary call with a cross-border planning specialist can clarify your options, with no obligation.
Because the tax turns on situs, understanding which of your assets are US-situated is the whole game. US-situated assets include US-listed shares and stock awards, US mutual funds, US real estate, and tangible property located in the US. Two points are especially useful. First, US bank deposits are generally not US-situs, so cash in a US bank account is usually outside the net. Second, and this is central to how the exposure is managed, shares in a non-US company or fund are generally not US-situs, even if that company or fund itself holds US shares. In other words, it is not exposure to the US market that creates the problem, it is holding US shares directly in your own name. That distinction is the key that unlocks the solution.
The good news is that this is a well-understood problem with established solutions, and the aim is to keep the US market exposure you want while removing the US estate tax risk you do not. Because the trap attaches to US shares held directly, the exposure can be addressed by changing the structure in which those shares are held rather than giving up the investment. Holding US market exposure through a non-US structure, so that what you own is an interest in a non-US vehicle rather than US shares directly, can move the assets outside the US estate tax net altogether. For someone who has accumulated vested stock awards, this can mean restructuring existing holdings into a suitable arrangement; for someone earlier in their career, it can mean setting things up correctly as awards vest. One important note: restructuring existing holdings can itself have tax consequences, such as capital gains tax in your country of residence (none in the UAE, but the UK and others do tax gains), so the timing and method need careful planning. The right structure depends on your circumstances, your country of residence, your wider tax position and your plans, which is why this is a conversation to have with a specialist rather than a do-it-yourself exercise. The important point is that the risk is not something you simply have to accept: it can be planned away with the right approach.
There is one further quirk of the US rules that is genuinely useful and little known. While US estate tax applies to US shares on death, US gift tax generally does not apply to lifetime gifts of intangible property, such as shares and bonds, made by a non-US person. In plain terms, a non-American can often give away US shares during their lifetime without triggering US gift tax, even though those same shares would be exposed to US estate tax if still held at death. This opens a potential lifetime planning route that does not exist for US real estate or tangible US property, where gift tax does apply. It is not a complete answer on its own, and it interacts with your own country's rules on gifts and inheritance, but it is a meaningful tool in the right circumstances, and another reason that planning ahead beats leaving US shares sitting exposed.
Take this guide with you
Get the full guide as a PDF to read later or share — plus occasional updates when the rules covered here change.
No spam — just this guide and relevant updates. Unsubscribe any time.
People paid in RSUs think carefully about income tax on vesting and capital gains on sale, but almost never about US estate tax. Yet vested US shares are US-situated assets sitting in a 40% estate tax net with a $60,000 exemption. The compensation you were pleased to receive can carry an exposure nobody mentioned.
Advice written for a British or European audience often reassures readers that a treaty raises the exemption. For most of the world, including the entire Gulf, there is no treaty, and that reassurance does not apply. Check whether your country of residence and domicile is actually on the short list before relying on it.
Holding your US shares through a platform outside the US does not change their situs. The shares remain US-situated and remain exposed. It is what you hold, US shares directly, that matters, not where the account happens to sit.
The exposure grows silently as awards vest and the shares appreciate. The longer a large holding of US shares sits directly in your own name, the larger the potential liability, and the more valuable it is to have addressed the structure sooner rather than later.
Some people, on discovering the trap, assume they must either sell out of the US market or simply accept the risk. Neither is true. The exposure can be managed by changing how the shares are held, keeping the investment while removing the tax risk, which is exactly why it is worth taking advice rather than doing nothing.
Priya had worked for a major US technology company for nine years, latterly based in Dubai, and had accumulated around $1.2 million in vested shares of her US-listed employer through her annual stock awards. She thought of these simply as her savings, and had considered the income tax on vesting carefully, but had never been told that the shares themselves were US-situated assets. Because the UAE has no estate tax treaty with the US, her exposure was to the full 40% rate above only $60,000, a potential US estate tax liability of several hundred thousand dollars, entirely separate from anything in her home country.
Once the exposure was identified, the priority was to keep her US market investment, which had served her well, while removing the estate tax risk attached to holding the shares directly. Her accumulated holding was restructured so that her US market exposure was held through a suitable non-US arrangement rather than as US shares in her own name, taking the assets outside the US estate tax net. The timing was planned around her tax position, and the approach was set up so that future vesting awards could be handled the same way, preventing the exposure from simply rebuilding over time.
Priya retained the US market exposure she wanted and the value she had built, but her family was no longer facing a potential six-figure US tax bill on assets she had not even realised were exposed. The investment stayed; the structural risk did not.
Illustrative example, not a real client.
Clarity Global Wealth helps internationally mobile professionals, particularly those paid in US shares, understand and remove an exposure that most people never knew they had. We start by identifying how much of your wealth is in US-situated assets, whether through stock compensation, direct shareholdings or US property, and quantifying the potential US estate tax exposure given that most countries, including the UAE and the wider Gulf, have no treaty with the US. From there, the focus is practical: keeping the US market exposure you want while restructuring how it is held so that it no longer sits inside the US estate tax net, and making sure future stock awards are handled the same way rather than rebuilding the problem. Because this interacts with your wider estate and the rules of your own country of residence, including any tax cost of restructuring, we look at the whole picture and coordinate with the right tax and legal specialists. The message is a reassuring one: this is a well-understood risk with established solutions, and the sooner it is addressed, the more straightforward it is to put right.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
Book a complimentary consultation to discuss your pensions, investments and cross-border financial planning.
A short call to understand your situation and discuss the planning options available to you.
Complimentary 30-minute consultation
Schedule a ConsultationHow US estate tax affects British expats holding US shares or property in 2026: the $60,000 trap, the US-UK treaty that rescues you, and dividend withholding.
Estate PlanningA 2026 guide for UAE and GCC expats on life insurance structures, trust planning, Sharia succession rules, and protecting assets for beneficiaries across borders.
Estate PlanningHow the UK abolition of non-dom status and April 2027 pension IHT changes affect British expats with overseas trusts, offshore bonds and pension savings. 2026 guide.
