Short answer: yes, it can. For someone who is neither a U.S. citizen nor domiciled in the United States for estate-tax purposes at death, shares in a U.S.-domiciled ETF can form part of the U.S.-situated estate. The important question is what the investor legally owns: the IRS generally treats stock of a corporation organised under U.S. law as U.S.-situated property. An ETF’s legal and tax structure must therefore be checked; “ETF” alone does not determine the result. See the IRS Form 706-NA instructions, “Stock”.
Checked on 30 September 2026 against the IRS sources linked here, including the Form 706-NA instructions revised September 2025. This is general educational information, not personalised tax, legal or investment advice.
Start with the investor’s estate-tax status
“Non-U.S. investor” is convenient shorthand, not a legal classification. The IRS instructions, “Definitions”, define a nonresident not a citizen (NRNC) as a decedent who was neither U.S.-domiciled nor a U.S. citizen at death, subject to special territorial rules. Domicile can arise from living somewhere, even briefly, without a definite present intention of later leaving. It is not simply the address on a brokerage account.
Estate-tax domicile is distinct from income-tax residence; the IRS explicitly notes that a person can be a U.S. resident for income-tax purposes but a nonresident for estate-tax purposes. Citizenship is a separate question again. Living abroad does not bring a U.S. citizen within this NRNC framework. Former citizens and former long-term residents may also require a separate expatriation analysis under the same instructions.
Fund shares, not the broker’s postcode
Under the IRS stock-situs rule, stock in corporations organised in or under U.S. law is generally located in the United States, wherever the certificates are physically held; other corporate stock is generally located outside it. Applied to an ETF interest treated as corporate stock, the issuer’s organisation matters. An overseas broker, foreign exchange listing or euro trading currency does not by itself change that classification.
A U.S.-domiciled fund and a non-U.S.-domiciled fund tracking the same U.S. index are not necessarily the same asset for this purpose. Where the investor owns shares of a non-U.S. corporation, the general stock rule points outside the United States; holding U.S. investments inside that corporation does not itself make its shares U.S. corporate stock. This is not a blanket exemption for all overseas ETFs: trusts, partnerships and other structures need their own analysis. Check the prospectus, issuing entity, legal domicile and U.S. tax classification. Neither a ticker nor the word “Irish” proves a particular product’s treatment.
$60,000 is a filing test, not a tax calculation
The IRS NRNC estate-tax overview says Form 706-NA is required when the date-of-death value of U.S.-situated assets, plus adjusted taxable gifts and the gift-tax specific exemption where applicable, exceeds US$60,000. The threshold is not inflation-indexed. It concerns the relevant estate in aggregate, not a separate allowance for each ETF, account or broker.
Do not read this as “everything above US$60,000 is taxed at one fixed rate” or “a return means tax is due”. The instructions’ tax-computation sections separately apply allowable deductions, the rate schedule and applicable credits; treaties can affect the outcome. The much larger exemption figures discussed for U.S. citizens must not simply be imported into an NRNC calculation.
Two illustrative examples
Illustration A — adding accounts. Assume an NRNC owns directly held ETF shares confirmed to be U.S.-situated corporate stock worth US$50,000 at one broker and US$25,000 at another at death, with no other relevant assets or gift amounts. The total is US$75,000: it exceeds US$60,000 and triggers the ordinary filing test. US$50,000 alone, under those same assumptions, would not exceed that test. Neither observation calculates tax due. These examples apply the IRS filing rule, before any treaty-specific analysis.
Illustration B — same market, different issuer. Two investors track the same U.S. equity index. One owns shares in a U.S. corporate fund; the other owns shares in a non-U.S. corporate fund. Under the general stock-situs rule, those shares generally have different locations for estate-tax purposes, even if both accounts are with the same broker and both trade in dollars. This is a structural illustration, not a recommendation of a product or jurisdiction.
What can change the result?
Treaties. The IRS estate and gift tax treaty list is a starting point, not proof of entitlement. Applicable provisions can affect taxing rights or relief, depending on the treaty and the person’s facts. An income-tax treaty alone is not evidence of estate-tax protection; Canada’s estate provisions are specifically in Article XXIX B of its U.S. income-tax treaty. The Form 706-NA instructions require a statement when a return position relies on a death-tax treaty or protocol.
Deductions, marriage and ownership. The IRS overview explains that documented deductions can reduce the taxable estate. The instructions’ marital-deduction rules generally require a surviving U.S.-citizen spouse or property passing to a qualified domestic trust (QDOT) with the required election, unless a treaty allows otherwise. Marriage alone does not guarantee a deduction. Joint ownership, pensions, insurance, trusts and company wrappers can change what is included and how it is treated; do not assume every account is direct personal ownership or that a wrapper removes exposure.
A practical checklist for investors and families
- Confirm personal status. Record citizenship, domicile facts and any relevant expatriation history; distinguish these from income-tax residence.
- Identify each security. Keep the prospectus and evidence of the issuer, legal domicile, share class and tax structure. Verify the exact product before comparing alternatives.
- Map ownership and aggregate assets. Include relevant holdings across brokers and establish which gift amounts enter the filing test.
- Check valuation and relief. The IRS overview uses fair market value at death, not purchase cost. Ask an adviser about applicable valuation elections, deductions, credits and treaty eligibility; worldwide estate information may be needed.
- Prepare the administration. Keep statements, ownership records and adviser contacts accessible to the executor. Form 706-NA is normally due within 9 months after death, unless a filing extension is granted; the IRS instructions describe Form 4768 and an automatic 6-month filing extension on application. Do not assume a filing extension also extends payment.
- Review before changing investments. Obtain qualified cross-border advice on product domicile, transaction taxes, costs, reporting and local inheritance or estate taxes. Moving assets or changing a fund is not automatically the right answer.
For further research on fund structure, see our ETF explainer; to keep the separate concepts of residence and citizenship clear, read our guide to tax residency and citizenship. These resources provide background, not personalised advice.
Limits of this explanation
This article does not calculate any individual’s liability, verify a named ETF or resolve treaty eligibility. It focuses on U.S. federal estate tax, not all state or foreign succession rules, dividend withholding or capital-gains taxation. Local inheritance taxes can still matter even where U.S. estate tax does not. Not all investors or ETFs receive identical treatment. The useful first step is an accurate, documented inventory—not concealment, non-reporting or an unverified restructuring.