[WSBAPT] Foreign inheritance taxes

[Andrekita Silva]

  Yes, 

thank you!!  Your info is helpful to me!

andrekita
Law Office of F. Andrekita Silva
1325 Fourth Avenue, Suite 2000
Seattle, Washington 98101
206-224-8288
www.seattle-silvalaw.com

Quoting John Wickham <jdwickham at rockisland.com>:

> Many thanks to John S. and Diane. 
>
>   John Wickham
>   On 6/16/2020 9:35 AM, John J. Sullivan, Esq. wrote:
>
>> John:
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>>     You describe the foreign tax as an inheritance tax. If what you  
>> describe operates like the various state level inheritance taxes  
>> here in America it is not an estate tax (as in WA and at the  
>> federal level) imposed upon the transfer from the estate to the  
>> beneficiary for which the estate (and if improperly left unpaid the  
>> personal representative) is responsible. It is a tax upon the  
>> beneficiary’s receipt of the distribution from the estate.  
>> Incidentally, my understanding of history here in WA is we actually  
>> had an inheritance tax until about 1980 when a pick up estate tax  
>> was passed by initiative.
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>> I would be stunned, shocked and amazed to find that the foreign  
>> inheritance tax law imposes responsibility upon the estate or  
>> personal representative or has jurisdiction to do so if the estate  
>> has no contacts with the foreign country other than the  
>> beneficiary. I would recommend you check with the IRS website to  
>> see whether there is an estate tax treaty with the beneficiary’s  
>> home country and if so whether it says anything about that  
>> country’s inheritance tax.
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>>     Another thought. If the will simply leaves the property or its  
>> proceeds outright to  the foreign beneficiary, perhaps the  
>> beneficiary might wish to consider whether modifying the will  
>> through a TEDRA agreement to hold the inheritance in a testamentary  
>> trust here, or offshore, might remove the inheritance from the  
>> reach of the foreign inheritance tax. I would advise the client of  
>> the need for tax law advice by a licensed attorney in the foreign  
>> country as to whether this would work.
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>>     On the issue of apportioning the tax among the beneficiaries,  
>> unless there is some very specific provision in the will, I do not  
>> believe the estate or other beneficiaries should bear any part of  
>> the inheritance tax burden if it falls upon the recipient and not  
>> the estate as transferor.
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>>     John J. Sullivan
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>>       FROM: wsbapt-bounces at lists.wsbarppt.com  
>> <wsbapt-bounces at lists.wsbarppt.com>[1] ON BEHALF OF Diane J. Kiepe
>> SENT: Tuesday, June 16, 2020 8:09 AM
>> TO: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>[2]
>> SUBJECT: Re: [WSBAPT] Foreign inheritance taxes
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>>     Hi John,
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>>     Interesting question and why tax provisions in Wills can become  
>> crucial.  I would start with the Will and, if it says, as many  
>> Wills do, that taxes charged by reason of death of decedent  is  
>> paid from the residuary of estate I would say yes.
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>>     This is simply my gut response but I seem to recall this topic  
>> from days gone by in the discussions of drafting personalized tax  
>> provisions for QTIP property and other unusual circumstances.
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>>     Best to you,
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>>      /Diane J. Kiepe/
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>>      / /
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>>      Diane J. Kiepe
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>>      Douglas Eden
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>>      717 W. Sprague Ave.
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>>      Suite 1500
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>>      Spokane, WA  99201
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>>      djkiepe at depdslaw.com
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>>      509-455-5300
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>>       FROM: wsbapt-bounces at lists.wsbarppt.com  
>> <wsbapt-bounces at lists.wsbarppt.com> ON BEHALF OF John Wickham
>> SENT: Monday, June 15, 2020 5:31 PM
>> TO: wsbapt at lists.wsbarppt.com
>> SUBJECT: [WSBAPT] Foreign inheritance taxes
>>
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>>     Listmates:
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>>     Hypo: in a Washington probate, the Will contains a specific  
>> bequest to a citizen of a foreign country, who resides in that  
>> foreign country, of a modest piece of Washington real property.
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>>     That foreign country will assess a stiff inheritance tax when  
>> the citizen receives the bequest, whether it is still real property  
>> or whether the PR sells it and sends the net proceeds.
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>>     Does the estate bear any responsibility to the foreign  
>> government for its tax on its own citizen?
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>>     Thanks for your thoughts.
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>>     John
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>> --
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>> John D. Wickham
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>> P.O. Box 893
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>> Friday Harbor, WA 98250
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>> 360-378-7178
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>> 360-378-0849 Fax
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