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At Beacon Global Wealth we meet many interesting people from all over the World.

People who have packed up their bags left behind family and friends, whether for lifestyle or professional reasons and have relocated to different climes and cultures.

With this major decision comes real uncertainty and worry around how tax laws and rulings apply both in the new country of residence and the country of origin. We at Beacon Global Wealth recognise these worries as it is something we have done ourselves.  We aim to provide peace of mind, so our clients can focus on the important things in their life.

One of the biggest client areas we work with are United States connected persons and their financial planning . The investment and pension planning needs of US connected persons are complex and multifaceted and need special care, review and planning from a team of expert and joined up advisers.

What is a US Connected Person

Were you born in the USA?  Do you own a US passport? Have you lived in the USA? Have you worked in the USA? If you answer yes to any or all of these questions then it is highly likely you are a US Connected person.

Issues Facing Clients and What FATCA Means

Since the implementation of FATCA in 2014 (Foreign Account Tax Compliance Act) providing pension and investment solutions for US Connected Persons has become increasingly problematic. This is because many conventional investment solutions do not comply with US tax law. You may have noticed the number of banks and financial institutions who no longer deal with US connected persons.

The problem is as simple as opening your US passport then looking at item D on the inside cover

“All US citizens working and residing abroad are required to file and report on their worldwide income”.

There is over $1trillion held by over 10 million US persons outside the USA. Many of these people do not realise they need to file compliant US tax returns. If your affairs are not structured correctly and if you do not report ALL income including investment income correctly you will be in breach of US tax law and have the IRS to deal with. 

Options for Clients

Many investment options available in Europe to US Connected Persons will automatically put them in contravention of the US tax regime. For instance one of the more tax efficient options in France of an Assurance Vie creates some very serious taxation issues in the US.

To provide piece of mind and solve these issues we at Beacon Global Wealth have created a series of solutions for US Connected Persons using fully regulated Securities and Exchange Commission (SEC) investment managers and partners.

These solutions provide well costed, tax compliant and flexible options to assist in meeting the US tax reporting and investment needs of all clients.

Our investment and platform partners provide all the annual returns required by the individual for the IRS and in the required IRS format. So it is a simple and easy solution to a complex and potentially life changing problem.

After much research and experience a number of leading fund managers have been appointed because of their consistent long term risk graded investment performance, US compliant investment models, SEC regulation and IRS tax reporting.

Individual and personalised planning is essential and in conjunction with our US Tax Partners we are able to produce this compliant and modern solution without unnecessary costs or wrappers. These solutions provide peace of mind for our clients that they are now in structures that will not cause them to lose sleep because of tax worries and the IRS looking into their affairs.

Pension Planning

Planning for the future is a key part of our service and this includes pension planning for US Connected Persons It is possible for non-resident US Connected Persons to fund domestic US pensions but there are a number of issues these mostly revolve around the tax treatment for this group of individuals .

With our partner pension Trustees we can facilitate a pension solution for non-resident US Connected Persons with the added advantage that if you decide to return to the USA it Is still a compliant and tax efficient retirement structure.

With this pension structure there is no upper limit to pension contributions and it maybe accessed from the age of 50 this is unlike pensions in the USA. This structure offers greater scope for making significant pension contributions and benefitting from the Tax free growth available.

The key element is an annual accounting statement will be produced for the Member’s US tax filing (Forms 8938 and FBAR need to be filed). Thus keeping you fully compliant with US tax laws.

Returning to the US

With the minefield that is structuring and investing when you are a US Connected Person the peace of mind that ALL eventualities will be covered is vital.

All our solutions comply with US reporting and investment requirements as we have outlined. Again as we have said our investment managers are all SEC regulated so what has been established in Europe can be taken back to the US without alteration.

We have US qualified advisers in place to assist when a client returns to the United States, if the client wishes the service, pension and/or investment will not be affected.

Written by David Vacani of Beacon Global Wealth Management.

Contact: www.beaconglobalwealth.com tele 0044 333 241 6966