Gift tax in the United States
If a person is a non-resident alien for purposes of gift tax, taxation of gifts is determined in a different way. If the property is not located in the U.S., there is no gift tax. If it is intangible property, such as shares in U.S. corporations and interests in partnerships or LLCs, there is no gift tax.
Uniform Gifts to Minors Act
Until 1986, a UGMA or UTMA account allowed the assets to be taxed at the minor's income tax bracket. Tax law changes in 1986, 2006, 2007 and 2017 known as the "kiddie tax" have substantially reduced the tax savings of UGMAs and UTMAs. Until 2018, for beneficiaries under 19 (under 24 if a student), the first $1,000 of unearned income was tax-free, the second $1,000 was taxed at the minor's rate (typically 15%), and the amount over $2,000 was taxed at the parent's rate. The current rule is that for beneficiaries under 19 (under 24 if a student), the first $1,050 of unearned income is tax-free, the second $1,050 is taxed at the minor's rate (typically 12%), and the amount over $2,100 is taxed at the ordinary and capital gains rates applicable to trusts and estates. Minors can also invest in the stock market.