U.S. Estate Planners and Foreign Property: Part 2U.S. Estate Planners and Foreign Property: Part 2

Last month, we discussed domestic and international laws and tax rules that may apply to your clients who own foreign property or make foreign investments. Now, we consider the income tax consequences of owning foreign property or making foreign investments.

Passive Portfolio Investments

Like the United States, most foreign countries impose withholding taxes on the gross amount of dividends paid to foreign shareholders or interest paid to foreign account holders. Withholding rates often range from 20% to 35%. Most importantly, withholding rates are often reduced and sometimes eliminated altogether when paid to individuals eligible for benefits under a bilateral income tax treaty with the United States. The United States has currently enter...