Does a US brokerage account held in Canada trigger Form 706-NA?
Possibly. The test is where the asset is situated for US estate tax purposes, not where the account is administered or who holds the paperwork. Shares in US corporations are treated as property situated in the United States even when they sit in a foreign brokerage account, so an executor who reasons from the location of the statement can reach the wrong answer. The account itself is not the unit of analysis; the holdings inside it are. The first piece of work on an estate like this is a line-by-line schedule of what the deceased actually owned at the date of death, separating US-situs holdings from everything else. Only then can you say whether Form 706-NA is in play.
Which assets count as US-situs for Form 706-NA?
The two that come up most often are US real estate and shares in US corporations. Real property is straightforward — a house, a condominium or land physically in the United States. Shares are the part people miss, because the certificate or the account can be anywhere in the world and the holding is still US-situs property for estate tax. Other assets have their own situs tests and some of them do not follow intuition, which is why the schedule of assets matters more than any general rule of thumb. Build the inventory first, classify each line, and leave the exposure calculation until the classification is settled. An estate that guesses at classification usually guesses in the direction that suits it.
Do we file Form 706-NA if the estate owes no US estate tax?
Often yes. The filing obligation is decided by the facts — a non-resident, non-citizen deceased person who held US-situs property — rather than by whether tax is finally payable. A nil position does not remove the requirement, and in practice the return is how a nil position gets established at all. This matters more for non-resident estates than most executors expect, because the amount that passes free of US estate tax for a non-resident is far smaller than the amount a US person receives, unless a treaty adjusts it. So an estate with modest US holdings can sit above the line where a comparable US estate would be nowhere near it.
Does the Canada US treaty mean a Canadian estate can skip Form 706-NA?
No. A treaty can change the amount an estate is exposed on, and can provide relief that is worked out by reference to the share of the estate situated in the United States, but relief of that kind is claimed rather than assumed. It is claimed on a filed return, with the worldwide estate and the US-situs portion both set out so the proportion can be seen. An executor who treats the treaty as a reason not to file usually ends up filing anyway, later, with worse records and a weaker evidential position. Treat the treaty as the reason the return is worth preparing properly, not a reason to leave it unprepared.
Who files Form 706-NA when the executor lives outside the United States?
The executor of the estate, wherever they live. There is no separate domestic filer for a non-resident estate; the person administering the estate carries the return, and living in Canada or elsewhere does not shift that to a US institution. In practice the executor is also the only person who can assemble what the return needs — the date-of-death holdings, the valuations, and the worldwide estate figure that the US-situs proportion is measured against. Banks and brokers will supply statements but will not classify assets or take a position. Where several people are appointed jointly, decide early who is gathering what, because reconstructing an inventory twice is the commonest source of delay.
Does moving US shares to a Canadian broker avoid Form 706-NA?
Moving the custody does not change the situs. The exposure is about where the property is situated, not where the account sits or where the owner lives, so transferring US corporate shares from one brokerage to another leaves them US-situs property. What can change the analysis is what is owned rather than where it is held, and that is a planning question to work through while the owner is alive, with the whole holding structure on the table. Doing it after a death is not planning; it is an inventory exercise. If the aim is to manage the proportion of an estate that is exposed, the lever is the composition of the holdings.
What is Part XIII withholding?
Canada's flat withholding on certain payments to non-residents — dividends, interest to related parties, rents, royalties, pension and annuity payments, management fees. The payer withholds and remits, and is liable if they do not, which is why they insist on documentation. A treaty can reduce the rate, but only where the recipient has given the payer the declaration establishing entitlement before payment. Where too much was withheld, a refund claim is the route, with its own time limit. See Part XIII withholding review.
Can I avoid capital gains tax on a foreign property?
Not by virtue of it being foreign — there is no exemption for that, and the "keep it offshore" advice you may have read is how people acquire penalties rather than savings. What genuinely reduces the gain is ordinary and legitimate: principal residence relief where the property qualifies and the designation is made correctly, a properly built cost base including acquisition costs and capital improvements, the timing of the disposition, the treaty rules for real property, and credit for the foreign tax paid. See principal residence and foreign property.
