My Aunt died in February 2007 and I have been informed that I am a beneficiary of her trust and estate together with a number of other relatives and two US charities.

The estate is quite sizable and we have been advised that this is subject to 30% estate tax. We are all UK citizens and have been told that a tax treaty is in place between the UK and US governments.

Although the executors have been very helpful, as UK citizens, our unerstanding of US death duties is limited. Can you advise of the tax thresholds and if tax is payable on the entire amount of the estate or only on the portion above the tax threshold? Also, does the tax treaty have any bearing on this and are the charities tax exempt?

Many thanks.

Toria

Toria:

You can get a complete printout of the estate tax tables from Internal Revenue Service (http://www.irs.gov).

Generally, the first $2 million of the estate is exempt from estate taxes, then tax starts at 18% (I believe) and goes up dramatically from there.

The amounts left to the charities will be deduction, though, so the final tax bite should not be too bad.