On May 18, London & Capital presented an information meeting on investment options we Americans have when we live abroad. Daniel Freedman, head of the US Family Office at London & Capital, moderated the event. Tony McGloughlin, director at London & Capital in the US Family Office, was on the panel, as specialist in the investments. From AARO, Tim Ramier, Ramier Law Office and chairman of the AARO tax committee, and Mojgan Ghanipour, C.P.A. and partner at MG Partners were also on the panel, specialists in estate and tax planning. Behind the scenes, Joseph Cohen organized the event at the Intercontinental Marceau.
The meeting started off with the assumption that we did not need an introduction to FATCA, nor our FBAR and tax reporting obligations to the US. There was a very informative comparative table summarizing tax obligations in France and in the US: maximum income tax rate, capital gains tax rates, taxes on interest and dividends, social “contributions”, and wealth tax.
Daniel presented a case study, not one that represented us individually, but rather one that gathered together most of the complicated issues we face. Most of us do not face all these issues: an American woman, who already had a successful career in the US (retirement accounts and equity investments in addition to a fully paid up apartment in NYC), married to a Frenchman (not currently working), living in France since 2000, with two children, an apartment in Paris (bought for €900000 and now worth €2 million), an assurance vie contract…
With that scenario, there were several questions: what happens if they sell the apartment they live in? (US tax on gain of over $250,000 for the US taxpayer); how is the assurance vie handled for US taxes? Is it a good investment for us? (If you are American, you’re better off investing in the US with a brokerage account there. Assurance vie contracts, the multi-support ones, are PFICs and better to avoid them.) That brought up the question of getting a brokerage account. Of course, London & Capital have a solution for that, so while brokerages are dropping us, others are maintaining our connection to the US. This applies even if the American has no US address to claim.
French taxes were also discussed, including the ISF, which the case study family would definitely have to pay. Trusts, inheritance issues. (In France, US citizens can choose to have the estate settled under a US state’s regime rather than the French one.) The inheritance the American wife in the study will get will not be taxed in the US because it falls under the threshold, and it will not be taxed in France because the estate will have fulfilled the US tax obligations of reporting to the IRS and the treaty exempts it, then, from French taxes.
The case study allowed discussion of most of our issues. Daniel, the moderator, made sure that the questions were answered briefly and to the point. Personal circumstances were discussed privately with the panel members when the seminar was over.
AARO and AAWE plan to hold more events with London & Capital, less of an overview and more focused on specific case studies.