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U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Sat May 12, 2012 11:55 pm
by MachineGhost
Go away, American millionaires.
That’s what some of the world’s largest wealth-management firms are saying ahead of Washington’s implementation of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts. HSBC Holdings Plc (HSBA), Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. (DBS) all say they have turned away business.
“I don’t open U.S. accounts, period,”? said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory attitudes toward U.S. clients as “Draconian.”?
Full Story:
http://www.bloomberg.com/news/2012-05-0 ... looms.html
Re: U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Sun May 13, 2012 3:22 am
by craigr
It's not just millionaires, even very small accounts which use to be easy to setup at an overseas bank has become very difficult for Americans domiciled in the US especially. Swiss banks won't even talk to you any more and account minimums have gone through the roof for Swiss intermediary services which can open an account for you (if they'll even talk to you, which they largely won't).
There are some options still (discussed in our new book by coincidence!), but they could go away as well. In effect, there are capital controls being put in place with red tape instead of overt laws. It is becoming very hard for US persons to not have their money 100% in US banks (which may be the goal in my cynical view).
Re: U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Thu May 17, 2012 2:30 pm
by Pointedstick
craigr wrote:
It's not just millionaires, even very small accounts which use to be easy to setup at an overseas bank has become very difficult for Americans domiciled in the US especially. Swiss banks won't even talk to you any more and account minimums have gone through the roof for Swiss intermediary services which can open an account for you (if they'll even talk to you, which they largely won't).
There are some options still (discussed in our new book by coincidence!), but they could go away as well. In effect, there are capital controls being put in place with red tape instead of overt laws. It is becoming very hard for US persons to not have their money 100% in US banks (which may be the goal in my cynical view).
But of course that's the goal! As long as your money is in a bank that's subject to U.S. laws, the U.S. government can tax it, freeze it, etc.
Re: U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Thu May 17, 2012 2:47 pm
by MediumTex
It's a shame the Orwellian acronym creators in Congress couldn't have come up with a "T" word to add to the end of the Foreign Account Tax Compliance Act.
A "FATCAT" law basically making it illegal for wealth producers to move their wealth around the world would be almost as good as the PATRIOT Act that took away many of the rights earned through the courage and sacrifices of patriots throughout our history.
Re: U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Thu May 17, 2012 5:48 pm
by Gosso
Clive wrote:
There are indications that before/after January 2013, foreign (to US) investors in US ETF's might be inclined to pull the plug in lieu of 30% FATCA withholding taxes.
http://www.indexuniverse.eu/docs/presen ... AndTax.pdf
However, ETFs were not identified as belonging to a class of institutions which are deemed per se “good”? and therefore exempt from 30% FATCA withholding.
U.S. Millionaires Told Go Away
Great point. This is another reason why I'm hesitant to buy US ETF's, since they have the funky aroma of FATCA hanging around them. I cannot imagine that the US government would be so dumb as to discourage foreign investors, but you never know. Of course there is a tax treaty, so the 30% withholding tax would be returned (provided the proper forms are filled out), but I just don't like all the unknowns involved.
Here is an article presenting the Canadian Banks prospective on FATCA:
http://www.thestar.com/business/article ... washington
Although enacted in 2010, a full set of regulations have yet to be developed mainly because of the complexity of forcing foreign banks with American clients to record and hand over reams of documents. As a result, few international banks which have subsidiaries in the U.S. – and could face hefty fines of 30 per cent of their U.S. profits[/u] – will be able to comply by the now extended deadline of 2015.
Re: U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Thu May 17, 2012 11:05 pm
by murphy_p_t
craigr wrote:
It's not just millionaires, even very small accounts which use to be easy to setup at an overseas bank has become very difficult for Americans domiciled in the US especially.
any thoughts on why the overseas bank/broker care if you are "domiciled" or resident in the US? Doesn't everyone know that US persons must file tax return with Uncle Sam regardless of where one lives?
Re: U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Fri May 18, 2012 4:36 am
by craigr
murphy_p_t wrote:
craigr wrote:
It's not just millionaires, even very small accounts which use to be easy to setup at an overseas bank has become very difficult for Americans domiciled in the US especially.
any thoughts on why the overseas bank/broker care if you are "domiciled" or resident in the US? Doesn't everyone know that US persons must file tax return with Uncle Sam regardless of where one lives?
They care because it instantly makes them subject to US regulatory pressure. Most of them just don't want the hassle even now if you are US but not domiciled here.
Re: U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
Posted: Sat May 19, 2012 3:39 pm
by Ad Orientem
Tax and banking hassles created by the IRS for US citizens in other countries have gone from being a nuisance to becoming a nightmare. It's gotten so bad that a lot of Americans living abroad are having to consider renouncing their citizenship to escape the madhouse.