The US estate trap UK investors need to know about
IMPORTANT: This is not investment advice: I am not recommending that anyone sells any share or investment.
Whether you should buy, keep or sell an investment depends on your own financial circumstances and should be discussed with an appropriately authorised financial adviser. My point is to ring alarm bells and encourage sound Estate Planning. The list of potential problem shareholdings is a lot longer than the 50 below!
This article is about something quite different: what may happen to your estate if you die still owning certain US assets.
You could leave your executors facing substantial additional paperwork, professional costs and, in some cases, a delay measured in years rather than months before the investments can be dealt with at all.
You don’t have to live in America
A British investor can buy Apple, Microsoft, Nvidia or Amazon through an ordinary UK investment platform.
The account might be operated entirely from Britain. The shares might even be held through a nominee.
That does not necessarily prevent the US estate rules applying.
For someone who is neither a US citizen nor US-domiciled, shares in a corporation organised under US law are generally treated as situated in the United States for US estate-tax purposes. The IRS expressly says this applies even where shares are registered through a nominee.
The important figure is $60,000
The basic Form 706-NA filing threshold is only $60,000 of relevant US-situated assets at the date of death.
That is not $60,000 in each company.
It is the combined value.
You might have:
- $20,000 Apple
- $15,000 Nvidia
- $15,000 Microsoft
- $12,000 Amazon
Total: $62,000
Potential problem.
The IRS confirms that Form 706-NA is generally required where relevant US-situated assets, together with certain adjusted taxable gifts, exceed $60,000.
But does that mean US estate tax will actually be payable?
Not necessarily.
The UK and US have an Estate Tax Treaty and many British estates can obtain substantial treaty relief.
It is therefore perfectly possible for:
US estate tax actually payable: £0
while at the same time:
US tax return and IRS clearance required: Yes.
That distinction matters.
For many families the biggest problem may be administration and delay rather than tax.
How long could the shares be tied up?
This is where the issue becomes particularly unattractive.
Where IRS clearance is required, US transfer agents and registrars will commonly refuse to sell, transfer or distribute the shares until the necessary clearance has been obtained.
The IRS itself currently states that its transfer-certificate process for estates where Form 706-NA is not required can take approximately 12–18 months after it has received all the necessary documents.
For estates requiring Form 706-NA, specialist UK probate firm Lester Aldridge reported in August 2026 that cases which historically took six to nine months are currently taking two to three years in many instances.
If the IRS selects an estate for audit, they report that this can add at least another year.
So imagine this.
Someone dies owning £150,000 of otherwise perfectly straightforward US shares.
The family wants the shares sold.
Instead, the investment may effectively remain frozen while the executors obtain valuations, complete the US estate-tax documentation, make any UK-US treaty claim and wait for IRS clearance.
Meanwhile markets can rise or fall and the beneficiaries may simply have to wait.
What about money held in an American bank?
This needs care because not everything sitting in America is automatically a US-situs asset for estate-tax purposes.
Ordinary deposits with a US bank are generally treated as situated outside the United States for these purposes where they are not connected with carrying on a US trade or business.
So it would be misleading to say simply:
“Money in an American bank counts towards the $60,000.”
Often it doesn’t.
However, that doesn’t mean US bank and investment accounts can simply be ignored.
The IRS transfer-certificate procedure specifically asks executors to disclose US bank and investment accounts and asks whether US bank accounts were connected with a US trade or business.
And there is an important distinction between:
a genuine bank deposit
and
cash or investments sitting inside a US brokerage or investment account.
Money-market investments, securities, brokerage holdings and other financial products may have different treatment.
The exact asset needs to be identified.
50 US shares worth checking
This is an indicative list of US shares particularly likely to appear in British investment portfolios. It is not an investment ranking and certainly not a recommendation to sell any of them.
- Nvidia – NVDA
- Microsoft – MSFT
- Apple – AAPL
- Amazon – AMZN
- Tesla – TSLA
- Alphabet – GOOG / GOOGL
- Meta Platforms – META
- Advanced Micro Devices – AMD
- Palantir Technologies – PLTR
- Broadcom – AVGO
- Micron Technology – MU
- Strategy – MSTR
- SpaceX – SPCX
- Berkshire Hathaway – BRK.A / BRK.B
- Intel – INTC
- Oracle – ORCL
- PayPal – PYPL
- Netflix – NFLX
- IBM – IBM
- Johnson & Johnson – JNJ
- Coca-Cola – KO
- Walt Disney – DIS
- Ferguson Enterprises – FERG
- Keurig Dr Pepper – KDP
- Visa – V
- Mastercard – MA
- JPMorgan Chase – JPM
- Bank of America – BAC
- Exxon Mobil – XOM
- Chevron – CVX
- Eli Lilly – LLY
- Pfizer – PFE
- Procter & Gamble – PG
- Walmart – WMT
- Costco – COST
- McDonald’s – MCD
- Salesforce – CRM
- Adobe – ADBE
- Uber Technologies – UBER
- Airbnb – ABNB
- Coinbase Global – COIN
- Robinhood Markets – HOOD
- SoFi Technologies – SOFI
- CrowdStrike – CRWD
- ServiceNow – NOW
- CoreWeave – CRWV
- Rocket Lab – RKLB
- AST SpaceMobile – ASTS
- IonQ – IONQ
- GameStop – GME
It doesn’t matter that your investment account is in Britain
One of the easiest mistakes to make is thinking:
“They’re in my UK investment account, so they’re UK assets.”
That isn’t necessarily how the US rules work.
The important question is generally what you actually own and where the company is incorporated, not simply where your broker happens to be based.
The same warning should therefore be considered where direct US shares are held through a UK nominee or investment platform.
Equally, don’t assume everything traded in America is caught
The reverse mistake is also possible.
A company can trade on Nasdaq or the New York Stock Exchange without necessarily being incorporated in America.
ADRs and shares in companies incorporated in Britain, Ireland, Taiwan, the Netherlands and elsewhere need to be considered according to the actual underlying legal structure.
Likewise, owning units in a UK or Irish investment fund which itself invests in Apple, Nvidia and Microsoft is not necessarily the same thing as owning Apple, Nvidia and Microsoft shares directly.
Ferguson is a particularly interesting example
Ferguson is worth highlighting because many British investors originally acquired what they quite reasonably regarded as shares in a British business.
The group subsequently moved its corporate domicile to the United States.
An investor can therefore end up with a US estate-planning issue without ever deliberately deciding to buy what they regarded as an American investment.
So should you sell your US shares before you die?
That is not what this article is saying.
This is not investment advice.
There may be excellent investment reasons for retaining US shares and there may be tax, capital gains, income, pension or portfolio consequences from selling them.
The sensible point is much simpler:
Know what you own.
If your direct US holdings are becoming significant — particularly if their combined value is approaching or exceeds $60,000 — include the issue in your estate planning.
Consider discussing the position with an authorised financial adviser and, where appropriate, someone experienced in UK-US estate administration.
A relatively simple review during your lifetime could potentially save your executors discovering the problem after your death, when you are no longer around to change anything.
IMPORTANT DISCLAIMER
This article provides general information about estate administration and potential US estate-tax and IRS-clearance issues. It is not investment, financial, tax or legal advice and should not be interpreted as a recommendation to buy, retain or sell any investment mentioned.
Investment values can fall as well as rise. Selling or restructuring investments may itself have tax and financial consequences. Individual circumstances differ and appropriate professional advice should be obtained before taking action.