Die Owning US Stocks = Pay 40% Tax

Prominent international tax and wealth advisor shares how non-US citizens can avoid US estate tax

Protect your portfolio and heirs – transfer US stocks with $0 due in US estate tax

 

Dear Curious Reader:

You’re on the right path and are preparing for the future. 

You’ve been saving and investing (or, are planning to start).

Part of your strategy to help achieve financial security has been to purchase US stocks – after all, America is home to some of the most profitable and well-known companies on Earth.

Successful investing is difficult enough… whether you execute your own trades or have found an honest and talented person to manage your money for you.

But the greed of the US government has made it unnecessarily complicated and less profitable for non-US persons to own and transfer US stock if you die owning them.

How?

According to US tax law, stocks of a US-based company are considered “US property.” 

So what? Why does that matter?

As “US property,” your US stocks are subject to US estate tax!

This comes as a shock to many non-US persons because trading or gifting stocks generally does not trigger US tax.

It’s estimated that non-US persons own a staggering 35% of all publicly traded US stocks. The US estate tax also applies to stocks in private (non-publicly traded) US companies as well

But millions of people are unaware of their potential US tax obligations – an understandable oversight given the complexities of the US tax system.

You what else is an understandable oversight?

Owning US stocks without even knowing it.

Picking stocks is not easy. There’s a good reason why many choose to hire professionals to manage their investments. I 

People get wrapped up in their day-to-day lives with work, family, and friends. They only check their accounts once a month (or, once a quarter) just to see how things are going.

It happens all the time.. people own US stocks without realizing it!

But that won’t let you off the hook with the US government.

Here’s a simple example to demonstrate how the US estate tax works.

Hans is an Austrian citizen who owns $1.5 million in US stocks (such as Amazon, Apple, Google (Alphabet Inc.), Tesla, Microsoft, etc.). He plans to give all of his stock to his only child, Klaus.

Because Hans owns stocks in US-based companies, US estate taxes apply when Hans dies and leaves them to his son Klaus.

The US government does allow for a small amount to be exempted from the estate tax – $60,000.

But everything above the exemption amount is subject to a 40% tax rate.

Estate tax rates start at 18% and top out at 40% on estates value at $1,000,000 and over.

Let’s run the numbers for Hans and Klaus.

$1.5 million – $60,000 = $1.44 million that is subject to a 40% US estate tax.

$1.44 million x 40% tax rate = $576,000 owed in taxes (paid by Hans’ estate)!

In the end, Klaus would only receive $924,000 (or, 61.6%) of his $1.5 million inheritance.

How’s that for a return on investment?

The US estate tax is particularly harsh and nasty. 

Even if you and your heirs have never set foot in America, your estate can owe US taxes. 

Does that really sound fair?

How would a 40% estate tax impact your heirs?

Are they expecting to receive your entire stock portfolio?

What happens to your heirs if they only receive about 60% of the value of your US stocks?

How have their expectations impacted their financial planning?

These are difficult questions…

… and if you’re anything like me, you’d rather find a better way to transfer your wealth. It’s easy to see that this whole estate tax scheme is a complete ripoff. 

Fortunately, there is a simple way for non-US persons with US stocks to avoid the US estate tax.

The US estate tax can be avoided by placing your US stocks inside a non-US company.

That’s why the US Estate Tax Blocker Solution includes a RAKICC company domiciled in the United Arab Emirates.

Esquire Group is one of a limited number of licensed corporate service providers by the Ras Al Khaimah International Corporate Centre (RAKICC) – a Corporate Registry responsible for the registration and incorporation of International Business Companies.

Why does a RAKICC company help? How does the US Estate Tax Blocker Solution work? 

By transferring your US stocks to your RAKICC company, you are no longer the owner of them. 

Your RAKICC company becomes the legal owner of the US stocks.

You will only own shares in your RAKICC company – this is critical.

Because the RAKICC company is non-US (i.e. foreign) corporation in the UAE, its shares are not considered “US property.” As a result, you cannot be held liable for US estate tax due to ownership of shares in a RAKICC company – even if that company owns US stocks. 

Plus, your RAKICC company is a foreign entity that can exist perpetually. It doesn’t die. As a result, your RAKICC company is not subject to US estate taxes.

Put simply, a RAKICC company shields your estate, your heirs, and your stocks from the US estate tax.

Remember the example above?

The simple move of putting his stocks in a RAKICC company would save Hans’ estate $576,000 in taxes (or, 38.4% of his $1.5 million portfolio).

Because of the US Estate Tax Blocker Solution, Hans’ heir would receive the full $1.5 million inheritance rather than $924,000 – (assuming no estate taxes are owed in their home country… more on that in the FAQ below). 

Run the numbers for yourself.

How much will the US Estate Tax Blocker Solution save your estate in taxes?

How much will your heirs receive if you die with your stocks in your name?

How much will they receive with the help of the US Estate Tax Blocker Solution?

The tax savings alone make the US Estate Tax Blocker Solution a worthwhile investment. 

But you’ll also receive other benefits such as…

Asset Protection – placing your stocks inside a RAKICC company also increases your asset protection by providing an extra layer of protection. 

Simply owning a company in a separate jurisdiction from your home and/or local jurisdiction can discourage many from filing a lawsuit as it could require travel and hiring lawyers in a foreign and unfamiliar country.  

Privacy – RAKICC companies provide privacy as owners and beneficiaries are not on the public record.

Estate Planning Flexibility – you’ll have enhanced estate planning flexibility with reduced administrative burdens. 

Assign each of your heirs certain ownership interests in your RAKICC company. Automatically, they’ll receive a proportional interest in the underlying stocks.

This reduces administrative costs and allows for fast and unencumbered investment decisions – a necessity in today’s dynamic markets.

What about local taxes? Will my RAKICC company owe taxes in the UAE?

No.

RAKICC companies are not subject to any UAE taxation.

The US Estate Tax Blocker Solution includes:

  One United Arab Emirates RAKICC company

√  Formation fees

√  First year Registered Agent Fees

√  Company documents

            • Memorandum and Articles of Association
            • Sample Resolutions
            • Certificate of Incorporation
            • Register of Members
            • Register of Directors

√  Banking introductions upon request

Best practices guide

The US Estate Tax Blocker Solution also includes a one-on-one consultation with an international tax expert.

You’ll get to speak with an expert who will answer your questions and ensure your results are maximized.

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FAQ 

Question: Will I owe taxes when I transfer my stocks to my RAKICC company?

√  Answer: You will not owe any US taxes when transferring US stock to your RAKICC company. 

However, you also need to consider your local and/or home jurisdiction.                       

Most people do not owe taxes in their local and/or when transferring stocks to their RAKICC company.

But we want to make sure that this is the case for you. 

That’s why the US Estate Blocker Solution includes a one-on-one consultation to review your personal situation.

If you are one of the rare people that owes taxes, we can help you minimize them.

Question: Can I still benefit from the US Estate Tax Blocker Solution if somebody else manages my stock portfolio?

  Answer: Yes.

We can still transfer your accounts to your RAKICC company even if someone else executes trades on your behalf. 

Question: Will my RAKICC company protect me from estate taxes in my local and/or home jurisdiction?

√  Answer: Unfortunately, the best answer is not satisfying… it depends.

It’s possible that a RAKICC company can protect you from estate taxes in your local and/or home jurisdiction but it is not guaranteed.

This needs to be determined on a case-by-case basis.

That’s why the US Estate Tax Blocker Solution includes a one-on-one consultation with an international tax expert. 

Question: Does the US Estate Tax Blocker Solution work on other assets?

√  Answer: Yes.

This solution works for stocks of private US companies, US real estate, and other US situs assets. 

Question: Is there a cheaper way to achieve the results offered by the US Estate Tax Blocker Solution? 

√  Answer: Yes. 

You can incorporate in a low-quality jurisdiction for about a thousand bucks.

But this comes with many risks.

The cheapest service providers are “entity mills” who make their money on volume.

Copy and paste is their business model.

They nickel and dime for all the documents and services you need to actually use the entity. 

The price of an entity probably won’t include a consultation. If you pay for one, you’ll talk to an entity salesman… not an international tax expert. 

Look, there’s nothing wrong with being a price shopper.

But Esquire Group caters to people that want to skip the headaches and hassles that come with going cheap.

The US Estate Tax Blocker Solution is turnkey – you’ll have everything you need to operate your RAKICC company.

It includes a consultation with an international tax expert. You’ll get to ask all of your questions. We’ll guide you through this process to help you avoid mistakes.

Plus, you’ll get a best practices guide drafted by me that you can consult at any time.

Client Testimonial

On many occasions the Esquire Group has come through in the clutch. Being an independent contractor, I am always on the lookout for any tax breaks that are available to me.

Always thorough, James and his staff save me countless dollars that others have overlooked. These guys are legit!

Curtis A.
Esquire Group Client

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It is reassuring to know we can depend on everyone at the Esquire Group to answer or solve any problems we may encounter with our business ventures. All of our dealings with the Esquire Group have been professional, timely and efficient.

We chose the Esquire Group because of their experience and knowledge. They have set themselves apart from other firms and have exceeded our expectations.

Grey and Laurie Ruegamer
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Esquire Group came to our attention through a trusted advisor, and we are thrilled to be a satisfied client after all these years.  We look forward to many more years so we can remain compliant with the ever-changing reporting requirements.

Gina and Pete Culpepper
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I just want to thank Esquire services for a very professional job in handling my taxes. I hadn't filed taxes in the States for 17 years. So my backed taxes were a huge mess.

Esquire was extremely helpful and very patient in helping sort out this problem. I also compared their prices and services with other firms and found that Esquire was the best. I had a very pleasant experience with Esquire.

T.P.
Esquire Group Client

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Don’t let Hollywood form your ideas about what countries might be involved in your plan. I’ve seen stuff in movies that is out of date by three decades. There are some well-known jurisdictions when it comes to this kind of stuff. Maybe they are right for you; maybe not. 

Find a service provider who understands the importance of your unique situation and desires, and your heirs will expand on your legacy.

Jimmy Sexton, LLM
Founder & CEO of Esquire Group
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Question: What happens after the first year?

√  Answer: It is our goal to develop a long-term relationship with every client of Esquire Group.

We offer competitive fees for ongoing registered agent and corporate services.

We also offer tax preparation services.

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Sincerely,

Jimmy Sexton, LLM – Founder & CEO of Esquire Group

PS

Are the tax savings from the US Estate Tax Blocker Solution not enough?

Want help reducing your personal and business taxes? 

Want more asset protection?

If you want to speak with me personally, click below to book a consultation. 

I can answer your questions and help strategize a more thorough structure to help achieve your goals.

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