United States · Tax regime
US Federal Estate and Gift Tax (post-OBBBA)
The One Big Beautiful Bill Act (PL 119-21, signed 4 July 2025) permanently raised the federal estate, gift and GST exemption to USD 15,000,000 per person (USD 30M per couple) from 1 January 2026, with no sunset and indexation resuming in 2027. Critically, it did NOT change the exemption for non-domiciled foreigners, which remains fixed at USD 60,000 against US-situs assets.
The 250:1 gap between the USD 15M citizen/domiciliary exemption and the USD 60,000 non-domiciliary exemption is the most expensive number in US inbound planning. A foreign family holding a Manhattan apartment and a US brokerage account directly, rather than through a properly structured non-US blocker, is exposed to 40% on essentially the whole value at death.
The facts
- Total landed cost
- 40% federal estate tax above the exemption; state estate or inheritance tax in a minority of states on top
- Physical presence
- Domicile, not residence, controls for estate tax — and domicile is a subjective intent test, not a day count. A person can be a non-resident for income tax and domiciled for estate tax, or vice versa.
- Family
- unlimited marital deduction ONLY where the surviving spouse is a US citizen; otherwise a QDOT is required, and the 2026 annual exclusion for gifts to a non-citizen spouse is USD 194,000
- Permanent residency
- n/a
- Citizenship
- n/a
- Language test
- n/a
- Dual citizenship
- Permitted
- Requirements
- USD 15,000,000 exemption per person from 2026 (US citizens and domiciliaries), indexed from 2027USD 60,000 exemption for non-domiciled foreigners against US-situs assets40% top rate
- Non-domiciled foreigners get USD 60,000, not USD 15M. US real estate always has US situs. US-company shares have US situs even if held in a foreign brokerage account.
- Green card holders are generally treated as US-domiciled — taking a green card can move a family from the USD 60,000 regime to the USD 15M regime, or from a foreign estate regime into the US one entirely.
- There is no unlimited marital deduction for a non-citizen surviving spouse without a QDOT. This surprises mixed-nationality couples constantly.
- 'Permanent' means only that there is no sunset date in the statute. A future Congress can change it.
- Only a minority of US estate tax treaties (e.g. UK, France, Germany, Japan) give a foreign decedent a pro-rata share of the larger exemption. Most countries have none.