What is US Estate Tax on US Stocks? A Guide for Singapore Residents

Singapore residents are often confident that estate tax is not a concern here — and for Singapore-based assets, that is correct. Singapore abolished estate duty in 2008. But that protection does not extend past the border. If part of your portfolio sits in US-listed stocks or US-domiciled ETFs, those specific holdings can fall under a completely separate tax regime: US estate tax, imposed by the US government on non-US persons.

Why US Stocks Are Taxed Differently From the Rest of Your Estate

The United States taxes estates based on where an asset is located (its “situs”), not where the owner lives or holds citizenship. This means:

• US estate tax has nothing to do with Singapore law or Singapore estate duty (which does not exist since 2008)
• It applies specifically to US-situs assets — primarily shares of US-incorporated companies and US real estate
• It applies regardless of the broker used. Buying a US stock through a Singapore-based brokerage does not change its US-situs status

This is the part that surprises most people: the tax exposure comes from the company’s country of incorporation, not from where or how you bought the shares.

The Exemption Gap: $60,000 vs. Millions

US citizens and US domiciliaries receive a US estate tax exemption in the millions of dollars. Non-US persons — which includes Singapore citizens and PRs who are not US persons — receive only a $60,000 exemption on US-situs assets. Above that threshold, the excess is taxed at graduated rates reaching up to 40%.

For context: a Singaporean holding $500,000 in US-listed stocks (Apple, Microsoft, an S&P 500 ETF domiciled in the US) at death could see roughly 40% of the amount above $60,000 owed to the US government before the remainder passes to heirs — a liability most families never anticipate until it is already too late to plan around.

ETF Domicile Matters More Than Most Investors Realize

A common point of confusion: many popular ETFs that track US indices are themselves US-domiciled funds, even though they can be bought through any international brokerage, including Singapore-based platforms. Funds domiciled in the US are generally treated as US-situs assets for estate tax purposes.

The alternative many international investors use is non-US-domiciled funds — for example, Ireland-domiciled UCITS ETFs — that provide similar exposure to US markets (S&P 500, Nasdaq, etc.) without holding US-situs status. This is a structural choice made at the point of investing, not something that can be fixed after the fact.

What This Means for Estate Planning

Because US estate tax sits entirely outside Singapore law, it will not show up in a review that only looks at your will, CPF nomination, or Singapore property. A complete estate plan for anyone holding US brokerage assets needs to separately account for:

• What proportion of the portfolio is genuinely US-situs
• Whether the $60,000 exemption is already being exceeded
• Whether restructuring exposure (fund domicile, account structure) makes sense before it becomes an estate issue rather than after

Advisor Perspective

I see this gap most often with business owners and professionals who built up a US brokerage portfolio over years — often through platforms that make buying US stocks and ETFs frictionless — without ever connecting that activity to estate tax exposure. It is not a Singapore compliance issue, so it never surfaces during ordinary financial planning conversations. By the time it comes up in an estate review, the portfolio may already be well past the $60,000 threshold. The earlier this is identified, the more options exist to structure around it.

Common Mistakes

Assuming Singapore’s lack of estate duty covers all assets. It only covers Singapore-situs assets. US-situs holdings are governed entirely by US tax law.

Not knowing an ETF’s domicile. Two ETFs tracking the same index can have very different estate tax treatment depending on where the fund itself is domiciled.

Discovering the exposure only after the portfolio has grown significantly. The $60,000 exemption is fixed and low. Portfolios that started small can cross it without anyone noticing.

Treating this as a US tax filing issue only. Beyond potential tax owed, US-situs assets can also face delays in the US probate-adjacent process (Form 706-NA) before heirs can access the funds.