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The solution is to use your accidental US citizenship to your advantage. The US is actually a remarkable tax haven and has some amazing trust structures if you
by icu 6y ago
The solution is to use your accidental US citizenship to your advantage. The US is actually a remarkable tax haven and has some amazing trust structures if you know what you're doing.
For example the Roth IRA, will in most cases due to reciprocal tax treaties, allow for a tax free pension even when your tax residency is in another county.
On top of the trust structures I've alluded to, there are few reciprocal data sharing arrangements with countries forced to comply with FATCA. In other words, the data sharing usually only goes one way.
Yes, this is a remarkable pain to learn and administer, but it's all possible to do without paying thousands in ongoing accountant and lawyer fees.
This means that it's possible to shelter your assets in a remarkably secretive way the US. So in one sense, you could consider US taxes as insurance against spurious lawsuits in say the EU, or bad faith spouses wherever you get married.
- clawoo 6y agoYeah, I was surprised the article completely glossed over why nobody outside the US wants to deal with FATCA, because on face value it sounded like a good tool to prevent money laundering and tax haven stashing. But based on FATCA, only the other countries have a responsibility of reporting wealth information about US citizens, while if you are a Russian or a Brit or whatever you can safely stash all your wealth in the US if the tax regime is more lenient than your own country.
- KLexpat 6y agoThis is generally correct. One of the main effects of CRS being separate to FATCA is that a person from a CRS country like anywhere in the EU, UK, Aus, Canada, NZ... many countries... can hold assets in the US itself which is not a CRS signatory.
- lemonspat 6y agoIs the Roth 401k also then a tax shelter if your tax residency is elsewhere?
- icu 6y agoIt would depend on your country's tax treaty and the treatment of the Roth 401k's annual required minimum distributions (RMDs). In comparison, for countries that don't accept Roth IRA pension income as tax free when tax resident in that country, the Roth IRA allows you to flexibility plan income amounts to stay under income thresholds for tax. This is one of the things you need to consider with a Roth 401k. However, you could rollover funds from a Roth 401(k) to a Roth IRA, just be aware of the clock for the 5-year rule. If doing any of this stuff please for the love of binary get proper financial advice!
- elgatonegro 6y ago> Yes, this is a remarkable pain to learn and administer, but it's all possible to do without paying thousands in ongoing accountant and lawyer fees. Where does someone begin this process? A few starting points would be appreciated.
- icu 6y agoStart with "U.S. Taxes For Worldly Americans: The Traveling Expat's Guide to Living, Working, and Staying Tax Compliant Abroad" by Olivier Wagner
- aroberge 6y agoThis is an overgeneralization that is clearly incorrect in some cases. Just a quick example for Canadians, from [1]: > Usually, it is best for United States citizens to not hold TFSAs since the costs of tax reporting and compliance usually exceed any benefits. There is no US equivalent for TFSA. [1] https://www.taxesforexpats.com/articles/retirement/simple-us-tax-guide-for-canadian-retirement-plans.html https://www.taxesforexpats.com/articles/retirement/simple-us...
- MarkSweep 6y agoIt sounds very similar to a Roth IRA, the very account type mentioned by the GP. (Though the roll over and lack of income limits make it more accessible)
- Timpy 6y agoFor some reason I think the 53 year old Dutch hair salon owner would rather just be left in peace than brush up on American tax law.