PFICs are simply “pooled investments” registered outside of the United States. Pooled investments include foreign mutual funds, exchange-traded funds (ETFs), money-market funds, hedge funds, and investments within non-U.S. insurance products.
Almost any foreign investment product other than direct ownership of stocks and bonds is likely classified as a PFIC by the IRS.
PFICs are taxed at the highest rates. That’s why it is essential to know if you hold a PFIC in your investments and to learn how you can better position your investments for tax efficiency.
Tax efficiency as a U.S. person is vital to ensure your retirement and life planning goals are attainable.
The Foreign Account Tax Compliance Act (FATCA) is a law that requires U.S. citizens living at home or abroad to file annual reports on any foreign account holdings they have.
The IRS defines the assets as:
Foreign partnership interests
Foreign financial accounts
Foreign mutual funds
Foreign issued life insurance
Foreign hedge funds
Foreign real estate held through a foreign entity (You don’t need to report the real estate, but the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estate)
American Expats and U.S.-connected individuals living overseas are underserved due to foreign banks closing their accounts or their unwillingness to work with Americans because of the complexities of U.S. reporting obligations.
Often retirement assets held in a 401k are the most affected because a U.S. address is required to move the assets. If you’re a US citizen who worked in the United States prior to working abroad, or if you’re one of the millions of foreign nationals who spent time working in the United States, more than likely you have a company-sponsored 401k.
There are compliant and tax-efficient solutions available for U.S. retirement assets you may be holding.
Inheritance tax and other levies that are paid from your estate will normally be determined by where you lived.
Everyone has an eye on retirement. But living abroad has its own set of challenges, especially when it comes to Estate Planning. Inheritance tax and beneficiary rules differ from country to country and unfortunately, some expats have found themselves financially disadvantaged following the death of a loved one.
Estate planning covers wills, inheritances, and tax issues. While many expats engaged in estate planning before relocating overseas, the old plans may no longer be viable given the realities of living abroad.
There are strategies expats can use to decrease their estate tax liability
International Wealth Services
Services for Americans abroad and cross-border families outside the U.S.:
We specialize in helping Americans and U.S.-connected individuals living in France, Spain, Portugal and Ireland.
Beacon Global Wealth Management
Experience matters – Beacon Global Wealth Management has a dedicated international team of experts whose job it is to ensure that your financial plan’s tailored to your goals and situation, no matter where you are in the world.
US Connected Persons
Beacon Global Wealth Management are not tax experts and due to the complexities of the tax system and your aims and objectives, it is highly advisable that you seek an independent tax opinion. You are fully aware that BGWM are not Tax Advisers and as such cannot be held responsible should the applicable tax authority raise a claim against you for any future taxes.
The information on this page does not disclose all the risks and other significant issues related to the investments. Prior to transacting, potential investors should ensure that they have consulted with their financial adviser and fully understand the terms of the investments and any applicable risks.
Any views, opinions, or estimates expressed in this document reflect the current views and opinions of Beacon Global Wealth Management, however, these views, opinions, and estimates are subject to change.
The value of investment products may go down as well as up and any data on past performance, modeling, or back-testing contained herein is no indication as to future performance. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modeling or back-testing. The value of any investment may fluctuate as a result of market changes. The information in this document is not intended to predict actual results and no assurances are given with respect thereto.
The financial advisers trading under Beacon Global Wealth Management are members of Nexus Global (IFA network). Nexus Global is a division of Blacktower Financial Management (International) Limited (BFMI). All approved members of Nexus Global are appointed Representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission (FSC) and bound by the rules under licence number 03647
Nexus Global EU is a division of Blacktower Financial Management (Cyprus) Limited (BFMCL) and Blacktower Insurance Agents & Advisors Ltd (BIAAL). Beacon Global Wealth Management is an Appointed Representative of BFMCL which is licensed and regulated by the Cyprus Securities & Exchange Commission (CySEC) - Licence No. 386/20. Beacon Global Wealth Management is an Appointed Representative of BIAAL which is licensed and regulated by the Insurance Companies Control Service (ICCS) - Licence No. 5101