21 Oct The tax and estate planning pitfalls of retiring overseas
Have you dreamed of spending your golden years in a tropical paradise or a culture-rich European city? If so, it’s important to understand the potential tax and estate planning implications so there are no surprises. These include:
One option for avoiding U.S. taxes is to relinquish your U.S. citizenship. But this strategy raises a host of legal and tax issues of its own, including potential liability for a one-time “expatriation tax.”
2. Real estate issues. If you wish to purchase a home in a foreign country, you may discover that your ability to acquire property is restricted. Some countries, for example, prohibit foreigners from owning real estate that’s within a certain distance from the coast or even anywhere in the country. It may be possible to bypass these restrictions by using a corporation or trust to hold property, but this can create burdensome tax issues for U.S. citizens.
If you and your spouse are making retirement plans to live in another country, contact us now to reduce the chances of undesirable tax and estate planning consequences later.