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U.S. Estate Taxes

(from November 24, 1995 issue of Sales Bulletin)

Sales Bulletin #4825 dated September 8th, 1994 advised you of a new agreement between Canada and the United States on the imposition of United States Estate Tax on residents of Canada. This agreement has recently been ratified. The main effect is that Canadian residents will qualify for a basic exemption of up to US $600,000 on estate taxes on the property situated in the United States, an increase from the former exemption of US $60,000. The actual amount of the credit is pro-rated, based on the proportion of the value of the estate assets situated in the United States to the total value of worldwide assets of the estate. The provisions are retroactive to November 10. 1988, so that estates of Canadian residents who died after November 9, 1988 and paid U.S. estate taxes may be eligible for a refund. Further details of these rules will be provided in a future Sales Bulletin.