US estate taxes could be levied on non-US citizens & no-US residents.
I just read the most interesting report by Wegelin & Co, private bankers from Switzerland. Hats off to them. If your dare to read it in its entirety, most of you will almost fall off your chairs, I guarantee!
It shows, yet in another light/way, why all global investors should moving forward be heavily overweight on non-US securities! If this is right -and not corrected- huge sums of capital will be chasing non-US financial assets (and others) in among others emerging markets. This more then anything else explains, with another dimension, why the US$ currency will, just about must deteriorate in value and why one must remain upbeat on Asia securities. I so remain even more bullish with my niche Thai quality growth stocks.
While it’s a bit complicated and takes some focus by even a trained eye to get through it all, Wegelin & Co explain how even non-US people/investors/non-residents there could easily get caught in the trap on paying US taxes, that is, if they hold/held any kind of US securities. Not income taxes, but estate transfer taxes on ones transfer of wealth. Can you imagine the implications of this! Wealthy families, estates, all kind of funds, from all and anywhere around the world could be paying US estate taxes because they owned some US financial assets/derivatives, or even US$ currency? Yes, and this is the alarming part, even to those whom are not US citizens and do not live there.
Coming from this credible source it depicts how crazy or is it desperate things are getting in USA. Anybody, or their families, with substantial wealth which in any way owns/trades/is exposed to any kind of US securities (and it’s a very broad definition) could be liable being called by the US internal revenue service as a “US person”, and so thereby liable for US estate taxes. Yes, even as non-US citizen or resident! It explains how evading these will be nearly impossible as the global custodian bank might even have these assets frozen, until the US tax authorities (IRS) gives clearance. Please read the report yourselves to get your own sense of this awfulness. I for one was horrified what I just read there.
I make the point that non US securities/assets may well get the benefit of trillions which will so no longer be happy to own any US assets if such taxes come to stand. Yet, the US will need more foreign investment then ever before so to finance all their huge deficits in years to come.
Best Regards,
Paul Renaud
