Submitted by Tyler Durden
They are also probably familiar with the name Andrew Penney profiled in January by Bloomberg as follows:
Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.
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For financial advisers, the current state of play is simply a good business opportunity. In a draft of his San Francisco presentation, Rothschild’s Penney wrote that the U.S. “is effectively the biggest tax haven in the world.” The U.S., he added in language later excised from his prepared remarks, lacks “the resources to enforce foreign tax laws and has little appetite to do so.”
So for all those now former Mossack Fonseca, or their “Panamanian” peers who have not been rooted out yet, or for anyone else who wishes to open a domestic “trust”, here is the primer straight from Rothschild Trust.
- In the year since we opened Rothschild Trust North America in Reno, Nevada, we have discovered the versatility of Nevada trusts and their usefulness within the context of our international business.
- Rothschild Trust has long embraced clients with US connections and the complexity this brings to planning. Our new US offering has enabled us to offer creative solutions not only to anticipated situations, but also to unusual or complex scenarios that require bespoke structures.
- In our experience, Nevada trusts can be useful planning tools not only for onshore or first generation American families, but also for foreign offshore families looking to invest in the US.
- Such structures maintain privacy and block US estate tax liability, but are subject to two layers of income tax (at both the corporate and shareholder level) as well as high levels of both income and capital gains tax, making them inefficient for appreciating or income-generating property.
Worried about FATCA exposure abroad? Just use Rothschild domestically:
- In the build-up to FATCA implementation, some US clients who had assets in offshore trusts for historic reasons have decided to domesticate these structures to lower the burden of reporting. These domestications form part of the general trend we have seen towards moving structures onshore.
- The US, and Nevada in particular with its favourable trust laws and attractive state tax regime, offers a variety of planning opportunities that can achieve complex planning aims with simplified reporting obligations and compliance concerns.