What about Trusts?

[hernanday]

Maybe im old fashion , but would never save even 50% of my assets for long-term in crypto

OT , no one here that can point out good services that creates trusts or foundations?

You have to think carefully about this.

Ever heard of Panama Papers?

I get the sense you are trying to do something cute with taxes. I'm not here to judge you but provide you adequate balance of what could occur. These leaks occur from the large providers many Westerners use (think the big law firms the big hsbc bank account everyone uses). In some cases it would be more secure to go to these locations yourself, and set it up yourself, so you aren't caught up in some leak somewhere.

The best option for you I think is going to be vaults.

 

[hernanday]

Or just use reputable exchanges?

they are all reputable until they aren't. they are reputable until an insider, or a worker or owner or auditor in that exchange who makes a few hundred thousand dollars decided he wants to steal a few million and fake his death like the CEO of quadrigacx, which was the #1 exchange in Canada. We seen top exchanges like mtgox collapse due to corruption and theft, etc, and that was 70% of bitcoin transactions WORLD WIDE, the #1 supposedly most reputable one. IN fact, back then I think it might have been the only major one really, it handled virtually all bitcoin transactions at one point.

Don't put money into bitcoin or crypto you can't afford to lose, you can be hacked or more likely robbed by an exchange even the largest ones, even the "reputable" ones. It really isn't even all that anonymous because of KYC applying to the major exchanges, so your account is linked to you through KYC, and that is linked to your bank account when you sell and buy to receive and send out your crypto, and I believe the whole block chain is public anyway and KYC of the exchanges means they connect you to your wallet. And that is all subject to the taxmans subpoenas, so it is not even anonymous. I believe there are several cases of the taxman/govt back tracking and catching people with bitcoin who thought they were anonymous.

You'd be better off buying hard assets in a foreign nation that don't get registered into a bank. We live in a time where the democratic West of today acts more like the Soviet Union of yesteryear whereby every banker has essentially been transformed into a state sanctioned government informant of the pravda who will rat you out for legitimate banking transaction and freeze your accounts.

Look at the Chinese drug dealers selling fentanyl are they stacking up on bitcoin? No, they are buying real estate and art and assets and they are getting off with it too! From NYC, to Australia to Canada, these guys are not going to jail.

https://www.cnbc.com/2019/07/23/man-accused-of-laundering-millions-in-bitcoin-from-silk-road.htmlhttps://thenextweb.com/hardfork/201...lly-selling-hundreds-of-thousands-in-bitcoin/https://qz.com/1761343/bitcoin-money-laundering-is-a-classically-stupid-crime/
"Laundering money through bitcoin is a bad idea—not only because it’s illegal, but also because it leaves a permanent trail. Defendants have repeatedly been undone because they’ve relied on the cryptocurrency for some part of their nefarious activities. Sometimes, they’ve been arrested years after their alleged crimes. "

"
Government agencies have started contracting crypto-analytics firms like Chainalysis and CipherTrace to track down money launderers and other criminals.

“Cryptocurrencies have the reputation for being cross-border and anonymous, and therefore attractive to bad actors across the world,” Kim Grauer, senior economist for Chainalysis, explained to Quartz over email. “But because transactions involving cryptocurrencies like bitcoin are recorded on a permanent, public, and immutable ledger, cryptocurrencies can actually offer unprecedented transparency into financial transactions.”

Laundering money through bitcoin is like pulling off a jewelry heist, but leaving a map to your apartment at the scene of the crime. You can shred the map into tiny pieces—by sending bitcoin through multiple wallet addresses, or accounts, to hide your tracks—but with sufficient time and data-crunching power, it’s possible for other people to reassemble the clues."


"“The goal of money laundering is to create a chain of transactions that can’t be traced, so since the bitcoin blockchain is designed to have an indelible public record of all transactions, it makes ‘laundering’ much more difficult,” Dave Weisberger, CEO of CoinRoutes, a crypto order-routing service, said. “The technology from [blockchain analytics] firms such as Elliptic and Chainanalysis is sophisticated as well. They can trace [wallet] addresses quite well, which also make law enforcement easier.” "


Not to say he is trying to launder money, but the point is the government seemingly has figured out how to basically track bitcoin to individuals. Too many people are being caught and arrested off of what should be a supposedly anonymous system. It is actually EASIER to catch someone "hiding" money in crypto than probably the bank. They don't even need a search warrant, it is all public, so they can actually reverse search from the public ledger to catch you before they even SUSPECT you. This is why he said it makes law enforcement EASIER.

All this confirms is what I long suspected. Cash is king and along with bearer shares the ultimate form of anonymous asset holding. The government is in my "conspiracy theory" view behind bitcoin/crypto. They are just doing it to make it easier to catch people who they couldn't catch before.

It is much easier to catch a drug dealer with $10million in crypto purchases on a public ledger, than a drug dealer with a $250k farm/ranch in the middle of nowhere with $9 million spread out over dozens of acres buried in his property.

 

[GrumpyMess]

What the German fellow should have done, was bought a 2nd citizenship. Lived outside the EU except for 2-3 months.

How will another passport help him?

So you could set up an offshore foundation where you are a manager but not on the board, with nominee directors. You would then buy a house in the foundations name. Fill that house with cash, gold, metals, diamonds, art, persian rugs, buy parts of other successful businesses, and assets that tend to keep their value like movie props, artifacts, etc. You could even store your money in some of those overseas vaults like in Switzerland. The vaults won't report you, your money will be safe, and you will avoid crs, facta, etc. You could also make registry purchases. Super rich people buy assets on registries. They don't even keep or store the assets, they actually don't leave the vault, but you buy and sell them on these registries and they basically don't enter the financial system that the government can see. You buy a diamond for $100 million on the registry, you sell it 10 years later for $200 million, in the name of the foundation which is based in Bermuda or something and the government is never even aware of this so long as you never allow your money to touch a bank. You could ask the fund from registry be sent to your vault in switzerland in the form of gold bars or large denomination bills. Since this all occurs under the foundations name, you are not responsible for it tax wise.

You describe very interesting schemes, I appreciate that, but are they really working in 2020? You will be an effective beneficiary anyway, using nominees or not.

For example we are considering Switzerland. Can we just buy a house in the Bermuda's company name with nominees? Will the Switzerland establish an effective beneficiary? If yes, we are failed. If no, they can force to establish after some years and we are also failed. I don't know how to avoid it. Then we can fill the house with cash. Finally with inflation, maintenance and propery taxes we will be loosing quite noticeable amounts of money every year.

I don't know what's there with the vaults in Switzerland, but under 5AML such vaults will be reportable in EU. It's matter of time when they also will be reportable under CRS. The same with registry purchases. I don't know what are these secret registries to which the governments are indifferent. How to make a such big purchases without a bank account it's also a serious question.

Where most offshore people get in trouble is thinking they can stay in Canada, australia, USA, Germany whatever, and never leave AND pay zero taxes. That is impossible. You will get caught

That's true

 

[JohnLocke]

In some cases it would be more secure to go to these locations yourself, and set it up yourself, so you aren't caught up in some leak somewhere.

I couldn't agree more with this statement. It's a very good idea to use some of the smaller office and visit them in person. But you never know who is going to abuse your documents or setup.

 

[hernanday]

How will another passport help him?


You describe very interesting schemes, I appreciate that, but are they really working in 2020? You will be an effective beneficiary anyway, using nominees or not.

For example we are considering Switzerland. Can we just buy a house in the Bermuda's company name with nominees? Will the Switzerland establish an effective beneficiary? If yes, we are failed. If no, they can force to establish after some years and we are also failed. I don't know how to avoid it. Then we can fill the house with cash. Finally with inflation, maintenance and property taxes we will be loosing quite noticeable amounts of money every year.

I don't know what's there with the vaults in Switzerland, but under 5AML such vaults will be reportable in EU. It's matter of time when they also will be reportable under CRS. The same with registry purchases. I don't know what are these secret registries to which the governments are indifferent. How to make a such big purchases without a bank account it's also a serious question.


That's true

Help him to establish a 2nd residency more firmly and cut off his German ties. One test that many tax offices use is does this person still hold a passport of the said high tax nation in determining residency. If you are German and have a German passport, the tax office is going to try to argue you are still a German resident even if you have a 2nd visa because your visa is in your German passport, so you are still technically travelling around and operating as a German person. If you get arrested in Thailand on visa, you are probably still going to call the German embassy to bail you out.

Yes, you can buy property in the company name in Bermuda or some other offshore location in the company/foundation name. The real question is, how would Switzerland know that there exists a foundation you are a manager of, but not a director on, in Bermuda or another location that keeps this information private who could distribute funds to you in the future? This is usually the key breakdown are idiots not keeping their mouths shut and bragging to their tax offices that get them caught half the time. I know in some parts of Europe they might be pushing towards forcing you to disclose if you are a beneficiary of any organization.

Switzerland could attempt to establish an effective beneficiary of the Bermuda firm when you are a resident of Switzerland. As the Bermuda firm is not a Swiss firm their only link is you. Can you legally give money to a foreign foundation, yes. Do you know the beneficiary will be you in 3 years when you are no longer a Swiss resident in the future... I'd argue no. How do you know you will even be alive then? You cannot be made to predict the future by your tax office. The tax office may then try to argue after they see you bringing all this money in later that you basically gave yourself the money from your foundation. This is why staying out for a few years are important. Even if it were true, the law of Bermuda did not forbade it, and it occurred there. You were not a swiss resident when it occurred.

I agree, Europe will likely close these loopholes in the future.

I just checked out 5AML, yeah, this is getting pretty draconian and it said it extends to safety deposit boxes. As to how bank employees will be made to value art or diamonds in a deposit box, good luck.

I know in much of the EU they are slowly clamping down on cash. But many people with registry items gladly buy and sell in cash due to its anonymous nature. The registry often time facilitates this.

Many of these islands don't have property taxes, some do, but your property can also appreciate. Maintenance is just the cost of doing business and same for inflation. There is no perfect solution. If you put $20 million in the bank and it fails you lose your money minus 100k from protection, put it in real estate same thing, put it in a box in your yard can get stolen, many European banks have negative interest rates, so not only do you lose to inflation you also lose money nominally as well.

You do raise a valid point though. The noose is getting tighter, they are trying to close off all legitimate tax structures and end all financial privacy. They are going to get to the point where basically every transaction and every sum of money not held in your basement or in an asset is reportable somehow. All this means is that we have to structure our affairs more carefully. I've never viewed this as tax evasion, as I see it, it is too hard/risky to do, their exist a plethora of ways to legitimately pay zero tax as it stands today. With the internet making it easier than ever to be location independent, it is hardly necessary to even live in a country you run a business from. For me offshore has always been about asset protection from creditors/criminals who want to make fake claims and sue you to steal your business. I've never viewed it for purposes of cheating tax.

I believe at some point, the madness will stop. Mainly because the governments will accept/realize that it is just not effective as more citizens leave, as more business owners run their businesses remotely from offshore havens, etc.

 

[hernanday]

I couldn't agree more with this statement. It's a very good idea to use some of the smaller office and visit them in person. But you never know who is going to abuse your documents or setup.

That is the fundamental challenge, and I don't have an answer for that yet. Do you use a big reputable place more likely to expose you like panama papers or do you use a smaller place where the person has no or few bosses and can flip on you on a dime.

The best answer I've been able to find is diversification. Never put all your eggs in one basket. different islands, different offices, different structures, different strategies and spread the money around. At least that way if you get screwed, like that billionaire's daughter in Liechtenstein where the trustee spended $100 million USD+ of the trust money while refusing to distribute the funds to her as required, at least if that happens, you are not completely screwed. Had that billionaire Israel Perry created 100-200 trust and spread his $1.3 billion across them and added on corporations and foundations, banks and insurance firms etc. Had he done that, One or two corrupt trustee/lawyer would screw his family out of just $7-13 million instead of the full 1.3 billion.

Most of the trustee won't screw you, a few will. Just accept that as the cost of doing business. Just like in the movie goodfellas, they stole money from the bank and the guys they paid money to count the stolen money stole money from them. The trick is to be realistic. Some people will screw you, but most won't so spread your funds around so that when it occurs, you aren't a*s out completely.

That might mean, if you have $5 million you don't give it all to one trustee. Maybe you set up 10-20 trust or structures with 20 different trustees/nominees. So you aren't at risk of losing more than $250k per person. Yeah its costly, but much less costly than losing $5 million to one guy. Much less costly than your 1 lawyer selling your file to your government showing you owe 40% of $5 million in taxes vs 40%of 250k.

 

[GrumpyMess]

The real question is, how would Switzerland know that there exists a foundation you are a manager of, but not a director on, in Bermuda or another location that keeps this information private who could distribute funds to you in the future?

They can create a law, so you have do disclose a final beneficiary, the same policy which exists now in banking sector.

Do you know the beneficiary will be you in 3 years when you are no longer a Swiss resident in the future

similarly to the CFC law, you are an effective beneficiary

Many of these islands don't have property taxes, some do, but your property can also appreciate. Maintenance is just the cost of doing business and same for inflation.

I mean a property tax in the country the property is situated in. Also utilities must be payed. I don't know how to do it without a bank account.

I understood this way: I establish a trust or a simple offshore company with nominees. Let it be a country A. Then I find a property in a country B, then I find a person in that country B which buys a property in the name of company. On the papers it will be like I gave the cash to the company and the company gives it to that person to buy a property.

But I have no idea how to own such a property, how to connect and pay utilities and the most important how to sell it later without a bank account. And I don’t even speak about buy to let. I don't try to challenge your statements, I try to understand if it's doable nowadays and won't it be a big headache in future.

exist a plethora of ways to legitimately pay zero tax as it stands today

Unfortunately no, especially without sacrificing freedom.

But many people with registry items gladly buy and sell in cash due to its anonymous nature. The registry often time facilitates this.

Can you give an example of such registry?

 

[hernanday]

They can create a law, so you have do disclose a final beneficiary, the same policy which exists now in banking sector.

Of course, they can create any law they want, there is nothing we can do about new laws, but try to comply with it. As it stands now, there is no such law,as far as I am aware, but I recognize we come from different nations on this board.

similarly to the CFC law, you are an effective beneficiary

CFC laws do not require you to predict if you will manage a foundation in the future. To my knowledge, CFC laws basically prevent you from opening a HQ in Bermuda for a CORPORATION, that say a Swiss nation controls 100% of, then just returning to Switzerland and claiming it is HQ in Bermuda so no tax. This is different than a non-profit foundation located offshore, whereby you happen to be a manager. There are technically no profits, no shares, or even shareholders. Further with nominee directors, good luck proving the manager has complete control. You are simply a manager with access to the funds like in any other business. You have to read the laws carefully in your nation because they vary by nation so this is a general statement of course. Typically the CFC rules deem that you must basically own the corporation or 40% of it. Foundations currently exist as a loophole. They are basically non-profits. There are ways these things can be structured to for instance have the residents controlled portion to fall under the CFC rules, while still giving them the authority and ability to have full access of funds. Sometimes this may include operating through a 2nd or even 3rd nation.

I mean a property tax in the country the property is situated in. Also utilities must be payed. I don't know how to do it without a bank account.

Yes, you must shop for one with low prop taxes. That can be done, you can have a property management firm or local who you pay in cash use their account. Their are also concierge services you can either find or have perform this for you.

I understood this way: I establish a trust or a simple offshore company with nominees. Let it be a country A. Then I find a property in a country B, then I find a person in that country B which buys a property in the name of company. On the papers it will be like I gave the cash to the company and the company gives it to that person to buy a property.

But I have no idea how to own such a property, how to connect and pay utilities and the most important how to sell it later without a bank account. And I don’t even speak about buy to let. I don't try to challenge your statements, I try to understand if it's doable nowadays and won't it be a big headache in future.

I don't understand your example or statement, I feel like I'm missing the context or something, could you explain your comment in a different way?
Challenging statements is a good thing, we are all here to learn, including me. If there is something I am overlooking, I want that to be challenged here rather than by the tax man later. So I could have the chance to fix that issue before it cost me money.

Unfortunately no, especially without sacrificing freedom.

Can you give an example of such registry?

I'm not sure why you think it would involve sacrificing freedom to not pay tax when there are many zero tax nations. I'm not advocating breaking tax law, and I don't think Cayman Islands or BVI has any less freedom than high tax states in the eu or north america.

https://www.dupontregistry.com/

 

[grieff]

Laundering money through bitcoin is like pulling off a jewelry heist, but leaving a map to your apartment at the scene of the crime. You can shred the map into tiny pieces—by sending bitcoin through multiple wallet addresses, or accounts, to hide your tracks—but with sufficient time and data-crunching power, it’s possible for other people to reassemble the clues."

This can be avoided with careful planning involving tumblers and hardware wallets.

 

[clemens]

I wonder how they ever will find out the destination of a bitcoin payment if it is send from an untraceable bitcoin wallet to a tumbler to finally hit some fake account with payout to a debit card?

 

[hernanday]

This can be avoided with careful planning involving tumblers and hardware wallets.

https://en.wikipedia.org/wiki/Cryptocurrency_tumbler
They are throwing them in jail and catching their clients.

I'm inclined to think digital things have too much digital signatures on them. I'd rather a bag of cash than a bag of bitcoins.

 

[GrumpyMess]

Are there any trust setups with cheap maintenance fee available?

 

[JustAnotherNomad]

You need to check the legislation where you live, as @Martin Everson pointed out.
I think trusts are only recognized in the Anglo-Saxon world. In other jurisdictions, you would have to use a foundation.
Note that foundations are more expensive than trusts.

Regarding the second passport, I’m not sure that’s necessary a good idea, unless you’re American or have shitty passport like from India that doesn’t get you into any countries without a visa. Most countries don’t allow dual citizenship, so when they find out you got a second passport, they will revoke your first citizenship. So then you’ll be a citizen of Paraguay only, good luck with that.

Most civilized country do NOT claim you a tax resident if you’ve properly left the country for a few years. Only the US does that.

 

[Martin Everson]

Are there any trust setups with cheap maintenance fee available?

Whats cheap to you so I get an idea?

Most civilized country do NOT claim you a tax resident if you’ve properly left the country for a few years.

For now at least . I am pretty sure EU will insist in future that its nationals indefinitely report after leaving even if no tax is due and your no longer a tax resident. There are many reasons they could do this. For example Capital Gains Tax (CGT) is a big issue and is how most of the wealthy structure their assets as CGT rates are often lower then income tax rates. EU countries will need to keep track off your future movements to recover CGT for the period you were resident if you sell after leaving. For example people in Spain who lived there at least 10 of the last 15 years and who left with more than 4m in shareholding are liable for CGT if they sell the shares withing 10 years AFTER LEAVING Spain and the EU. You can defer the tax if you move to another EU country however. Anyway food for thought.

P.S Get out of EU while you still can . Thresholds will gradually get lower and lower and EU Exit Taxation is already active .

 

[JustAnotherNomad]

Yes, many countries have some sort of cold grip on you for several years after you’ve left.
That’s why I wrote “after a few years.”

 

[Martin Everson]

That’s why I wrote “after a few years.”

10 years is not a few years to me....lol

P.S Get out of EU while you can people.....lol. You will thank me one day.

 

[GrumpyMess]

Whats cheap to you so I get an idea?

Let me better describe the task, for example there is 100k potential future income. It's required to hide and protect it as much as possible. So that under no circumstances could they be taken away by anyone.

 

[Suzy Emerald]

Well, in some countries in the EU already, like NL, you have to file taxes every year even if not being resident anymore.

 

[Martin Everson]

Let me better describe the task, for example there is 100k potential future income. It's required to hide and protect it as much as possible. So that under no circumstances could they be taken away by anyone.

A Trust is not an option then. It would cost several 1000's every year to maintain and would be uneconomical in the long run in my opinion. You may want to just cash out and put somewhere safe. Whatever you decide do not keep in a bank or EMI anywhere in the world.

 

[CaptK]

First Question is how much is it?
Second is it worth going through all the costs and gymnastics.
In my opinion is that if its worth spending 20K per year to achieve your goal then just move to a tax friendly state for the period of time you require.
You need to cut all ties with home nation and only come to visit for holidays, weddings and funerals. When I say cut all ties I mean cancel everything and sell your house or rent it out (declare tax on the rent). No mobile phone contract or any other bills in your name.
Example get a residency visa and or get a "job" in the UAE. You get a residency card which then gets you a tax certificate. There are no taxes at all (for now), and all your money goes into your local UAE account. You can buy gold and silver for market price you can even get it delivered to your door. You can leave it in your flat, place it in a safety deposit box or at the bank. If at the bank you can access funds, the bank will give you an overdraft against it and you can close the overdraft by signing away the gold to the amount you have borrowed. Or just sell as much as you need, there are many buyers of gold in the UAE and large cash transactions with reputable buyers and sellers is normal.