Cross-Border Financial Advisors for Internationally Mobile Individuals

What cross-border tax planning strategies can you use to reduce your taxes?

Smart cross-border tax planning often must be separated into three distinct buckets: ordinary income, passive investment income, and efficient estate planning. All three of these require advanced planning techniques based on individual circumstances.

Planning around ordinary income taxation often involves understanding the timing and source of income, along with the deliberate management of employer stock compensation programs.

Tax planning for passive investment income offers far more opportunities, specifically around the timing of realized capital gains and losses, and the utilization of tax-advantaged structures.

Efficient cross-border estate planning focuses on maximizing the after-tax transfer of wealth to the next generation; these strategies can vary widely and can become quite complex in structure.

What can you do to financially prepare yourself for an international relocation?

Planning a move to another country is an exciting, but daunting, undertaking requiring planning and preparation. There are many things to consider: where you’ll live, where your children will go to school, how to arrange compensation agreements, and so on.

It is just as important to properly arrange your financial life. The most obvious first step to create an international financial plan is opening bank accounts in your new host country. You may also need a new credit card. Should you relocate your financial assets to the new host country? This is a big decision, and often should be made over time with appropriate tax planning advice. One factor to consider in these decisions is if your move is permanent or only for a set time period.

Regardless, our international wealth advisors, advise that families consolidate their holdings into as few accounts and firms as possible. Interacting with financial institutions while abroad can be a frustrating challenge. Our biggest piece of advice is, before you move, learn about the financial system of your new host country and what to expect in regard to taxes or regulations. Being proactive will help you avoid costly or time-consuming mistakes. Finally, you should be mindful of legal and estate planning considerations given your new cross-border lifestyle.

How do you coordinate and manage investment and retirement accounts in different countries?

Globally mobile families face extra challenges in managing investment portfolios located in multiple countries. In general, foreign financial institutions prefer to avoid clients who reside in the U.S., while U.S. institutions likewise prefer to not service accounts for people residing abroad.

We generally recommend that U.S. taxpayers maintain all their investment assets in the U.S. financial system, understanding that certain tax-advantaged foreign accounts must be left in the country where they were established. Consolidating assets in the U.S. enables you to enjoy the significant benefits of our system including low costs, a strong transparency, a regulatory environment, and abundant investment choices, along with the appropriate tax reporting. Foreign professionals coming into the U.S. have the added challenge of moving portfolios into the U.S. or facing the difficulty of overseeing accounts in another country.

Cross-border families face a far more complex wealth management challenge. In general, they are better served by finding a trusted cross-border financial advisor who can understand their unique situation.

What should you know about owning real estate in multiple countries?

Real estate often accounts for a large percentage of a global family’s net worth. It is not uncommon for cross-border families to own multiple properties in multiple countries – some primary residences and second homes, and some owned solely as rental properties.

The owner of rental income properties will need to pay taxes on that income in the country where it is located — a credit is then applied to reduce U.S. taxes. This can get complicated as each country may have distinct tax treatment of real estate. Finally, be wary of strange tax outcomes upon selling foreign real estate as a result of currency fluctuations relative to the U.S. dollar.

How do you protect your family in case something happens to you?

An international lifestyle creates some obvious questions around immigration status and taxation, but also more vital issues arise related to access to medical care, legal rules governing healthcare, financial power of attorney, and estate planning.

Our international financial planners advise clients on strategies to ensure that their wishes and trusted relationships are legally documented in every country in which they spend time or hold assets. This is an area that many people overlook to their detriment, as unforeseen consequences can very negatively impact your loved ones.

What are the financial implications of having citizenship or residency in another country?

The decision to seek citizenship or permanent residency always leads to unique outcomes depending on one’s own personal situation. There are very important ramifications including one’s ability to live and work in certain jurisdictions, as well as ongoing income tax and estate planning considerations.

Foreign citizens considering becoming a U.S. citizen or permanent resident of the U.S. should consider the long-term pros and cons of the decision given the unique worldwide tax filing requirements this country demands.