Now Is The Time to Act To Protect Your Assets Against The Coming Wealth Tax
How to Avoid Wealth Taxes – Coming to a Place Near You Soon
All around the world politicians and bureaucrats are dreaming up new ways to tax the rich to pay for the unprecedented level of public spending that has been shoring up economies in the face of the coronavirus economic crisis.
Public spending has rocketed, particularly in larger economies like the USA, the UK and the EU. Central banks have been printing fiat currencies like there’s no tomorrow. However all this has to be paid for. It’s always more popular to tax the so called rich because there are much fewer of them. They can’t, by themselves, vote politicians out of office.
Wealth taxes are being promoted in the US and the UK. They are very popular with the populace with most people supporting new ways to tax the rich. Argentina has already introduced a wealth tax to pay for the additional coronavirus spending incurred by the government. Any Argentine resident with assets of over 200,000,000 pesos (around $2.4m) will pay a tax of at least 2% of their assets.
Those holding assets offshore will pay up to 5.25% of the value of their assets. This is supposed to be a temporary one off measure but there’s never anything temporary about government programmes. Expect a new wealth tax to last for years and the threshold at which they apply to get lower and lower.
In the United States wealthy tax payers are even suggesting that this is a good idea! Morris Pearl, chair of a group called Patriotic Millionaires, writing about the Argentinian wealth tax said “We’ve asked so many Americans, from medical workers to retail workers to business owners, to sacrifice this year for the sake of others – it’s only right that those of us with so much more to give be asked to do the same. If Argentina can do it, why can’t the United States?” Talk about turkeys voting for Christmas!
Senator Elizabeth Warren has said that she will introduce a bill for a wealth tax of 2% on fortunes of more than $50m and 6% on assets of over $1bn. She said “It’s time to make the ultra-rich pay their fair share”
In the UK there have been suggestions of a wealth tax on those with assets of as little as £500,000. The chancellor Rishi Sunak has rejected the proposal for now but it’s not too difficult to see which direction the wind is blowing.
It’s now more important than ever for those who have even a modest 6 figure net-worth to take action to protect their assets. Let’s look at 7 strategies to protect your assets. Actions that you can take now from the comfort of your home to protect your assets from the coming government assaults:
Transfer Assets to an Overseas Corporation owned by a Foundation or Trust
When your assets are owned by a Trust or Offshore Company they technically don’t belong to you any more. A Trust, by its very nature, has no owners. Jurisdictions such as Panama, The Cook Islands and Nevis have strong privacy and asset protection provisions for Trusts and Foundations. Careful planning is essential but having assets owned by a trust is one sure fire method to avoid a wealth tax.
Buy Gold or Silver Held Securely Overseas
Precious metals are the ultimate hedge against inflation. Gold has been money for 5,000 years and it’ll still buy the same basket of goods it did 100 years ago or 200 years ago. Gold and Silver held securely overseas is not usually reportable on tax filings and therefore would be difficult to tax. If your gold holding’s owned by an offshore trust it would be impossible for any wealth tax to be applied on it. See our article on wealth preservation with gold here.
Buy Overseas Real Estate
Overseas property is a key part of any asset protection scheme. Like the precious metals, overseas real estate is not reportable to most tax authorities. It can easily be owned by an offshore company and any rental income generated from the property can go to the offshore company too. Offshore real estate, somewhere that you enjoy spending time is a great assets to have. A plan B should always involve real estate in a safe overseas jurisdiction where you can go in an emergency.
Invest in Cryptocurrency
Cryptocurrency is another asset class that is normally not reportable. Privacy coins like Monero are also difficult to trace or seize. Of course your funds held in Crypto can be owned by your offshore trust, making them unreportable for any wealth tax.
Borrow Against Assets Held in Your Own Country
With a wealth tax in place any assets held in your home country would be at risk. One strategy to avoid asset seizure is to make sure they are loaded with debt. You can either borrow against assets from commercial lenders and use the cash generated to buy overseas assets or borrow money from your own Company or Trust and put a security in place over the assets. Of course any transaction like this should be fully documented and on commercial terms.
Gift Assets to Family Members
It’s likely that a wealth tax will ick in at certain levels. In the UK £500,000 has been suggested. In the US the figure of $50m has been muted. You can make sure you keep your assets below the threshold amount by transferring assets to trusted family members
Plan to Move Away from High Tax Countries
The ultimate escape from a wealth tax is to move yourself and your assets out of high tax countries. If you have a business that’s not dependent on location you should be asking yourself why you’re still in a high tax country. At least set up a base somewhere else and have a home and a residence permit. A residence permit will eventually lead to a passport in a new country so even if you have to renounce your original citizenship to avoid the wealth tax that will be possible.
It’s obvious that a wealth tax is coming to most western countries. It’s important that you start planning now o avoid this affecting you. It’ll be too late to do it after the wealth tax has been introduced. We’ve outlined a few solid strategies here but there are many more things you can do to protect your assets being devoured by a wealth tax.
Our new Report – Bullett Proof Asset Protection goes into detail about the strategies you can take now to protect your assets from any kind of danger. Your assets are at risk from lawsuits, taxes, divorce and a multitude of other dangers nowadays. It’s worth spending the time to put solid asset protection measures in place to make sure your assets remain untouchable.