Wealthy non-citizens who live in the U.S. can, in some cases, take advantage of the current $5 million gift exemption to hedge their gifting. Individuals who are domiciled in the U.S. but who are not U.S. citizens must pay U.S. estate and gift taxes on transfers of “sitused” property located in the U.S. Non-domiciled individuals may gift unlimited non-U.S. situs property without incurring U.S. gift taxes, while U.S. domiciliaries will be subject to gift taxes on transfers of non-U.S. situs property that exceed the current exemption.
For more information of the current gift tax and its affect on non-U.S. citizens, see Beth D. Tractenberg and Kathryn von Matthiessen, Foreigners And The Gift Tax, Private Wealth Magazine, Jul. 2011.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.
