12.16.2020

Residency Planning – Save Money By Moving To A High-Tax Country

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Problem

Wealthy people can live wherever they want.

But many fear moving to certain jurisdictions because of the tax implications.

For example, moving to a desirable jurisdiction like Spain might seem unfeasible because of the tax consequences.

Thankfully, there is a strategy that could allow someone to move to a high-tax country and actually save on taxes.

Just because you physically move to a high-tax country does not mean that your wealth has to as well.

Solution

We created the Aeternum Trust to solve a variety of problems including undesirable tax consequences.

Non-US citizens can form a trust in the US with a 0% US tax rate and no tax return filing requirement.

The Aeternum Trust can expand your residency options and make it economically viable to move to a high-tax country.

Here’s how.

In most circumstances, it’s possible to structure your Aeternum Trust so that it will not be taxed by your country of residence and/or citizenship.

Since the assets placed inside your Aeternum Trust are subject to a 0% US tax rate, they can grow US tax-free.

This allows for rapid wealth accumulation.

But what’s the point of accumulating wealth without enjoying it?

Most jurisdictions will treat distributions you receive from your trust as taxable income.

Careful planning involves structuring distributions from your trust to secure your desired lifestyle.

Yes, you will pay taxes on distributions.

But your wealth will grow tax-free within the trust.

You can become more wealthy even after moving to a high-tax country due to the tax-free growth. 

Here is an example.

Suppose Marco earns $2 million dollars per year from his investment portfolio and $500,000 per year from consulting fees.

He currently pays 30% ($600,000) on his investment income and $30% ($150,000) on his income from consulting.

In total, he pays $750,000 in taxes in his home country.

Marco could transfers his stock portfolio to his Aeternum Trust. His stock portfolio now grows tax-free. 

He could then move to a higher tax country with a tax rate of 45% and actually save money on taxes.

Yes, Marco would pay $225,000 on his income from consulting – 45% of $500,000.

But he would owe $0 on his investment income.

On the whole, Marco has reduced his tax burden from $750,000 to $225,000 and now his stock portfolio is growing tax-free!

It’s up to you to determine if the cost of paying taxes on income is worth the “price of admission” to live in your preferred jurisdiction.

Other Beneficiaries

This strategy also expands the residency options for other beneficiaries of your trust.

This is a huge benefit for large and international families – especially those with adult children living in multiple countries around the world.

Additional Protection

Life is unpredictable.

Without a structure like a trust, your assets might transfer directly to your heirs upon your death.

Such a direct transfer might subject your assets to the laws of the jurisdiction in which your heirs live at the time of your death.

This could create massive tax liabilities and could threaten the future of a family business.

Multiple jurisdictions could fight over taxing and controlling your estate costing your heirs great time, effort, and expense.

It could take years to resolve the transfer of your assets to your heirs.

Your Aeternum Trust will shield its assets from falling under control of a beneficiary’s home jurisdiction.

Plan Before Funding

Some jurisdictions tax the value of assets transferred to structures like a trust.

Depending on your personal situation and goals, it might be necessary to engage in residency planning before funding your Aeternum Trust to avoid such taxes.

Sound Appealing?

Take the first step in forming an Aeternum Trust.

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