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Investing into US stock market as a nonresident alien while avoiding US estate tax

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PeepingTom

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Hi. Looking to invest into the US stock market but because I'm a nonresident alien living in Europe I am at risk of getting nearly half of my portfolio confiscated by virtue of the egregious estate tax the US has set in place for nonresidents investing into US domiciled securities. I have been doing research for workarounds. So far I have found two options. First, one could invest into Ireland-domiciled ETF's, but these two are not without their flaws. Based on what I've read, one will have to pay capital gains taxes in Ireland in the event of sale even if one has no relation to Ireland, and Irish capital gains tax is really high. Second option is to simply invest into mutual or pension funds holding US stocks and ETF's through local financial institutions. I myself am from Eastern Europe and banks here do offer such products. Is anyone aware of any other methods of investing into US stock market while protecting oneself from the possibility of the rapacious US estate tax?
 
#2
The good news is that you will never see this happen. But if you are worried about your death and want to protect your relatives (not you), you can simply set up a company in Ireland and use that one to invest in US stocks. If you invest less than 60k, you do not need to worry as there is an exemption up to that amount. If you invest more, any company would probably do it. Also, you could envisage to open a portfolio in your kids names, gift then the money and invest in their names. Another alternative would be a live insurance that pays the anticipated estate tax upon your death.
 
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#5
lavel said:
how can you be so convinced about that?
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I recommend reading what people here are thought to believe in:
https://www.offshorecorptalk.com/pages/philosophy/
Firstly, the debate around taxation and public sector growth touches upon the essence of freedom. Lowering the world's highest taxes is seen as more crucial than expanding the largest public sector. This perspective stems from the belief that reduced taxes enhance personal freedom, while an expansive public sector may constrain individual liberties.
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Now, if @PeepingTom were to behave properly in accordance to the believes of @JohnLocke, which is that he pays as little tax as possible throughout his entire life therefore minimizing his personal subsidy to the rapacious tax guys, he will if course come to the liberal heaven. Now how should the tax guys be able to send that "tax dish" (you can really feel good it feeds the corrupt government in Australian English) to him? They simply cannot and as such for food never pass the Pearly gate and be diverted right into hell.
 
#7
daniels27 said:
The good news is that you will never see this happen. But if you are worried about your death and want to protect your relatives (not you), you can simply set up a company in Ireland and use that one to invest in US stocks. If you invest less than 60k, you do not need to worry as there is an exemption up to that amount. If you invest more, any company would probably do it. Also, you could envisage to open a portfolio in your kids names, gift then the money and invest in their names. Another alternative would be a live insurance that pays the anticipated estate tax upon your death.
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There was a thread here some months ago where someone claimed that a single person company won't work to legally avoid estate taxes.

PeepingTom said:
Hi. Looking to invest into the US stock market but because I'm a nonresident alien living in Europe I am at risk of getting nearly half of my portfolio confiscated by virtue of the egregious estate tax the US has set in place for nonresidents investing into US domiciled securities. I have been doing research for workarounds. So far I have found two options. First, one could invest into Ireland-domiciled ETF's, but these two are not without their flaws. Based on what I've read, one will have to pay capital gains taxes in Ireland in the event of sale even if one has no relation to Ireland, and Irish capital gains tax is really high. Second option is to simply invest into mutual or pension funds holding US stocks and ETF's through local financial institutions. I myself am from Eastern Europe and banks here do offer such products. Is anyone aware of any other methods of investing into US stock market while protecting oneself from the possibility of the rapacious US estate tax?
Click to expand...
You DON'T have to pay capital gains taxes to Ireland by holding (London listed) Ireland domiciled ETF. So this is the simple answer to your question, just buy the Ireland ETFs.
 
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#8
Open a company that has pass through taxation outside the US.

For example in Belize or Nevis, afterwards open an IBKR account and that should be it.

The withholding tax by the US will be based on your country of personal residence.
 
#10
Xshore said:
There was a thread here some months ago where someone claimed that a single person company won't work to legally avoid estate taxes.
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Probably depends. If the company continues to exist, I would imagine that it works. A single-member transparent US LLC most likely not as for IRS it never was a tax subject in the first place.
 
#12
In case you really are from Greece, you can die and rest in peace. There actually is a treaty that you will have the same extensions in estate tax on US stocks as US residents, which is currently at 13,610,000 USD:
https://www.irs.gov/businesses/small-businesses-self-employed/estate-gift-tax-treaties-internationalhttps://taxtopics.net/Greece.htm
Clank said:
US single member LLC will be subject to estate tax
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By the way, this is an interesting read:
https://www.wkblaw.com/wp-content/uploads/Single-Member-LLCs-Estate-Gift-Tax-Treatment.pdfYou could technically have a LLC with just one share transferred to your son but then elect to be treated as disregard entity for income tax purposes.

Or even go for this route and have your kids a members but without controlling shares:
https://www.investopedia.com/articles/personal-finance/071514/using-llc-estate-planning.asp
 
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#13
if you are worried about your death and want to protect your relatives (not you)
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#Bingo! 100% agreed!

I'm 100% on Team George!
Been on Team George for the +30years!
I've seen firsthand what unearned & undeserved money does to those who didn't earn it or worked for it. It's NOT a pretty sight! hi%#
I wished I had ONE successful exception story to relay, but sadly, I don't.

If the same men, dozens and dozens of them, who mentored me could NOT teach their own kids "ethics, morality, reliability, responsibility, manhood, etc.", how can I be so delusional to think I can? :rolleyes:
If these men couldn't, I certainly stand no chance of teaching mine anything! I'm NOT 1/10 of what these men were, not even on my best day! stupi#21

1727642239293.webp


;)
 
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#16
daniels27 said:
Then how about Ontario, British Columbian it British (L)LP?
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I'm just exploring this alternative as I have my investments with IBKR under my name. And I cannot find St. Kitts and Nevis in the tax haven list (non-cooperative jurisdictions) for the EU, which seems odd. It seems they removed it in 2020 because they are fully compliant, but I do not know how, keeping in mind how their LLCs and trusts work for what I can read: anonymous, 0% tax, and so on.
 
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#17
churumbelo said:
I'm just exploring this alternative as I have my investments with IBKR under my name. And I cannot find St. Kitts and Nevis in the tax haven list (non-cooperative jurisdictions) for the EU, which seems odd. It seems they removed it in 2020 because they are fully compliant, but I do not know how, keeping in mind how their LLCs and trusts work for what I can read: anonymous, 0% tax, and so on.
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Keep me posted on this. I have someone (unrelated to me - the widow of an associate) I may need to do this for, otherwise, lawyers, bankers and service providers will rip her off 100%!
 
#19
jafo said:
Keep me posted on this. I have someone (unrelated to me - the widow of an associate) I may need to do this for, otherwise, lawyers, bankers and service providers will rip her off 100%!
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Sure thing! But I am not in a rush, and there is no much (reliable or not) information online. It seems good at first, but let's see.
The cost, for what I have read so far, could be around 1000-1500 USD/yearly (incorporating is the same cost), not sure though.
 
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#20
Isn't it possible to invest in that market through a local bank in the country where you live?
 
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