07 April 2020 - Article
In April 2016, Withers' partners Richard Cassell and Penny Williams, and Special Counsel Caroline Moss (alongside Robert Williams, a former EY international tax partner) published the second edition of the Guide to US/UK Private Wealth Tax Planning. Like its predecessor, the book is a comprehensive and practical guide addressing common tax and estate planning issues faced by US and UK nationals, and other individuals with residence, family members, or assets in either jurisdiction.
Its 83 chapters are separated into two parts: Part 1 addresses the tax laws and regulations imposed by each jurisdiction, including:
- Income tax obligations for individuals and trusts and the options available for coming into tax compliance through IRS approved programs;
- US federal estate tax and UK inheritance tax exposure and the planning opportunities available to take advantage of each jurisdiction's unique tax regimes and exemptions, which is often utilized through the use of life insurance, marital trusts and charitable giving;
- The availability of the US-UK Income Tax Treaty and the US-UK Estate and Gift Tax Treaty;
- US Foreign Account Tax Compliance Act and the UK International Governmental Agreement; and
- The remittance basis rules of taxation and becoming domiciled or deemed-domiciled in the UK.
Part 2 applies the rules discussed in Part 1 to real life situations commonly faced by high net worth individuals with international connections. Specific examples include:
- Estate planning opportunities for individuals with spouses and civil-partners with different nationalities or domiciles through, for example, the use of a Qualified Domestic Trust;
- US and UK pre-immigration planning including the ability to realize gains, income or deductions before or after becoming a US tax resident and the rebasing of assets for UK purposes;
- Trust and partnership planning such as utilizing an excluded property trust before becoming deemed-domiciled in the UK and establishing a partnership (or family limited partnership) for the alleviation of US federal estate and gift tax; and
- Mitigating the impact of the Controlled Foreign Corporation and Passive Foreign Investment Company anti-avoidance regimes on a trust through using US ‘check-the box' regulations or the use of a foreign holding company.
Guide to US/UK Private Wealth Tax Planning is an ideal stocking stuffer for practitioners advising international clients on complex and evolving areas of US and UK tax law, though at over 750 pages of laws, regulations and helpful examples, you may just need a bigger stocking.