Matt C. Altro was recently interviewed by Jessica Bruno from Advisor’s Edge to analyze the potential impacts on US estate tax changes depending on who the US elects in November: Hillary Clinton or Donald Trump. The analysis was published in the October edition of the Advisor’s Edge magazine and also appeared online on Advisor.ca.
In the article, Matt reviews the different party platforms with regards to US estate tax and how electing a Republican or Democrat government will impact tax law. Matt also discusses other key cross border issues that may be affected by the 2016 US federal election, such as proposed tax bracket reform & taxation on RRSPs, and how this may affect Canadians’ desire to move to the US. Click here to view the article online or scroll down to read an excerpt from the piece.
EXPECT U.S. ESTATE TAX CHANGES NO MATTER WHO’S ELECTED
October 18 2016
Repeal taxes, or raise them?
Your cross-border clients face two vastly different estate tax bills depending on who wins the U.S. presidential election next month.
Democratic Party candidate Hillary Clinton would re-set U.S. estate tax rules to 2009 levels – meaning estates will be subject to the tax if their worldwide values exceed US$3.5 million. That’s more than US$2 million lower than the current threshold of US$5.45 million. Canadians with U.S. assets of US$60,000 or more, and all U.S. persons, must pay estate tax if they exceed the threshold.
Clinton would also increase the tax rate for eligible estates from 40% to as much as 65%. Her campaign estimates the changes would affect four in 1,000 estates.
The higher rates would widen an existing gap between your client’s U.S. and Canadian estate liabilities. The U.S. taxes estates on their values, while Canada taxes a person’s capital gains on death. The policy difference can result in a hefty U.S. bill, says cross-border advisor Matt Altro, of MCA Cross Border Advisors in Montreal.