All U.S. citizens and residents are subject to the estate tax on worldwide assets regardless of their country of residence. Thus, a U.S. citizen who resides in Canada will be subject to the estate tax. Moreover, where a person who does not reside in the U.S. decides to strip himself of his U.S. citizenship, estate tax may still apply in full if his death occurs within 10 years of that time.

If an individual is neither and has never been a citizen nor a resident of the U.S., he may still be subject to U.S. estate taxes depending on his ownership of U.S. situs assets on the date of his death. U.S. situs assets generally include investment in U.S. securities, including portfolio assets, and direct and indirect investments in real estate located in the U.S.

To the extent that U.S. estate taxes are levied on the death of a Canadian resident, it may be possible to apply the estate tax as a foreign tax credit against the Canadian taxation of the gain on the assets which arose from the time of the person’s immigration to Canada until his death.

The determination of a person’s liability for U.S. estate taxes is complex and should be reviewed with a U.S.-based tax advisor.

Disclaimer
The nature of this facility is to provide a general response to a general question. Under no circumstances should anyone act on this information without obtaining analysis and counsel from a qualified advisor with respect to the specific situation.
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Phillip Nadler, CA
Richter Usher & Vineberg
http://www.richter.ca