Moving Money OffshoreAug 11 • Categorized as Asset Protection,Offshore Banking
By Jay Butler, Asset Protection Services
The Internal Revenue Service (IRS) considers all income reportable regardless of the source or location derived and most assets held offshore are reportable, however some are not. When looking to preserve your assets it is important to understand the difference between taxable income and reportable assets. Here are 3 ways to legally move money offshore without any requirements to report it to the United States government, the IRS or international regulatory agency.
1.) Opening an Offshore Bank Account
According to the Foreign Bank and Financial Authority (FBAR) regulations, the IRS has provided for individuals to open private offshore bank accounts where so long as the aggregate value of all foreign financial accounts does not exceed $10,000 (USD) at any time during the calendar year the assets need not be reported. Be mindful of interest bearing accounts, for if your total offshore accounts exceed $10,000 (USD) the IRS requires you to report it or risk facing a maximum penalty of five years in prison and the loss of up to 50% of your assets. The benefit to this strategy lies in having a family open an offshore bank account in the name of each family member in the amount of $9,990 (USD) into a non-interest bearing account. Provided a person is careful to adhere to these guidelines this is a safe and easy way to quickly move tens of thousands of dollars out of the country, depending on the size of the family.
2.) Purchasing Offshore Real Estate
All offshore non-income producing real estate investments need not be reported. Research thoroughly when choosing a country in which to invest. Real estate laws, and the stability of governments that enforce those laws, vary tremendously from one jurisdiction to the next. Take great care in countries where foreigners may not obtain direct ownership of a property and are forced to have properties held in some type of local trust. Your real estate investment is only as secure as your ability to prove ownership. Generally, it is best to hold title in an entity such as an international business company not only for asset protection and tax benefits but for the ease of transferring title upon a sale. This strategy is of particular interest for those who wish to expatriate as many countries permit an individual to obtain a permanent VISA or even citizenship with a large enough financial contribution (as much as $500,000) into real property.
3.) Creating an Offshore Irrevocable Entity
The use of an offshore irrevocable entity, such as an irrevocable Trust or Foundation, permanently removes the ownership of assets and irrevocably assigns them to the offshore entity. Irrevocably assigning assets outside the jurisdictional reach of an individual’s resident country need not be reported. This strategy is of particular benefit for a person desiring to protect their estate assets for future generations. Many investors have used this strategy to hedge their assets against devaluing currencies, volatile markets and nationalized industries by holding securities backed by raw tangible assets such as gold, silver, palladium and precise metals. In order to avoid the risks associated with non-securitized Exchange Traded Funds (ETF), it is highly recommended to purchase an ETF where the institution is able to verify assets in their physical possession. Such secured commodities ensure the authenticity of the purchase and generally draw a higher premium as a result. A properly funded offshore irrevocable entity, formed in a favorable jurisdiction, can ensure generational wealth preservation.
To learn more, see: PremierOffshore.com