U.S. Federal Estate and Generation-Skipping Transfer Tax Rates  /  143

• The Canada–U.S. Treaty increases the credit for residents of Canada from the $13,000

allowed under U.S. law up to the amount of the credit allowed to U.S. citizens. However, 

the credit must be prorated by the ratio of the FMV of the individual’s U.S. situs assets over 

the worldwide estate.

• In 2013, a generation-skipping transfer tax of 40% will apply in addition to any estate or gift

tax payable on certain transfers to individuals or trusts that are more than one generation 

below the transferor. Each U.S. individual will be entitled to a lifetime exemption for 

generation-skipping transfers of $5,250,000, but an election may be required on a gift or 

estate tax return to provide the intended utilization of the exemption.

• The following table summarizes both the exemption amounts and the highest tax rates

for estate and gift taxes, for the years 2011 to 2013. For 2012 and subsequent years, the 

‘estate exempt amount’ will be indexed for inflation.

      

            Estate 

      Lifetime Gift           Highest Estate and 

 

            Exempt Amount       Exempt Amount 

          Gift Tax Rate

2011        

         $5,000,000 

       $5,000,000 

     35% (estate tax only)

2012                     5,120,000 

         5,120,000 

     35

2013 and  

           5,250,000 

         5,250,000 

     40 

subsequent years

Current as of June 30, 2013

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.