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Owning Apple shares can create a US tax problem you never signed up for.

US estate tax applies to non-citizens too — based on what you own, not who you are. Most Canadians will never actually owe it, but the mechanism catches people who assumed it simply didn't apply to them.

Plenty of Canadians hold US stocks, a US vacation property, or both, and reasonably assume US estate tax is a US-citizen problem. It isn't. It's an asset problem — and once you understand what counts, most Canadian holders turn out fine, but a real minority genuinely don't.

The headline number that scares people, and why it usually doesn't apply

In practice, the Canada-US Tax Treaty rescues most Canadians from that bare number. Article XXIX B lets a Canadian resident's estate claim a prorated share of the same exemption US citizens get — which is $15,000,000 USD per person for 2026, made permanent by the One Big Beautiful Bill Act signed July 2025. The proration is based on the ratio of your US situs assets to your entire worldwide estate — meaning unless your worldwide estate exceeds roughly $15,000,000 USD, you're very unlikely to owe US estate tax at all, treaty relief included.

What actually counts as "US situs"

This is the part that surprises people: where your brokerage account is located doesn't matter. What matters is where the underlying company is domiciled.

That first "not situs" row is the single most useful, actionable fact here: swapping direct US stock holdings for a Canadian-listed fund that holds the same US companies sidesteps this exposure entirely — same market exposure, different tax treatment.

Even below the exemption, there's still a filing trigger

If US situs assets exceed $60,000 USD at death, the estate is generally required to file Form 706-NA with the IRS — even if the treaty-based exemption means no tax is actually owed. This is a compliance obligation independent of whether tax is due, and it's often missed since "no tax owing" gets mentally rounded down to "nothing to file."

Rates, if they do apply

US federal estate tax is graduated, from 18% up to 40% on the value of the taxable estate above the exemption. This only bites the portion above whatever exemption applies after treaty relief — not the whole estate.

Practical ways this gets managed

• Hold US securities through Canadian-domiciled funds instead of individual US stocks — the simplest fix for most people, with a real tradeoff worth understanding: holding US property inside a Canadian corporation can create its own double-taxation considerations on income and eventual capital gains, so this isn't free of complexity either.
• Trusts to hold US real estate or securities, avoiding direct personal ownership — genuinely effective, but adds real structuring cost and complexity, typically only worthwhile once US exposure is substantial.
• Life insurance specifically to fund a potential US estate tax liability, for those whose worldwide estate is large enough that real exposure exists.