Cross-Border Tax Planning Experts: Protecting International Capital in a World of Overlapping Jurisdictions

Inbound Foreign Investment (FDI) Structuring: Avoiding the Estate Tax Trap

When foreign nationals attempt to purchase high-end US real estate or establish a domestic operating subsidiary, the IRS sets immediate structural traps. If a foreign individual purchases $5 million in Manhattan real estate directly in their own name, they expose their entire global net worth to the brutal 40% US Estate Tax upon death — with an insultingly low $60,000 exemption available to non-residents as opposed to the $13.6 million exclusion available to US citizens. This makes proactive estate and trust planning absolutely critical before the first dollar of US investment is made.

We intercept these investments before they close and architect complex inbound structures. By utilizing foreign corporate holding companies, specifically structured foreign trusts, or carefully designed US REIT vehicles, we completely shield the foreign investor's global wealth from US estate tax exposure, while simultaneously optimizing their FIRPTA (Foreign Investment in Real Property Tax Act) withholding exposure upon the eventual sale of the property. The FIRPTA withholding regime requires buyers to withhold between 10% and 15% of the gross sales price when purchasing from a foreign seller — not the gain, the full price — making proactive structuring the only viable protective measure.

Pre-Immigration Tax Planning: The Costliest Mistake UHNW Families Make

Moving to the United States as a high-net-worth individual without executing pre-immigration tax planning is one of the most catastrophically expensive financial mistakes a family of means can make. The moment you cross the threshold and trigger US residency — either through obtaining a Green Card or through the mechanical Substantial Presence Test — the IRS instantly claims the legal right to tax your worldwide income, and your worldwide estate becomes subject to federal estate taxes on a basis that can reach 40%.

We work with wealthy families months before they immigrate. In the pre-immigration window, we strategically accelerate the recognition of foreign income while it is still taxed only locally. We execute massive tax-free step-ups in basis on appreciated global assets — essentially resetting the cost basis on low-basis foreign securities, real estate, and business holdings to their fair market value before US taxation begins. We restructure foreign holdings into offshore trust vehicles or drop-down LLCs before the US tax net descends, permanently sheltering pre-immigration appreciation from the American taxing authority.

Families who arrive without this planning in place face an immediate multi-year penalty period during which they cannot unwind the damage without triggering the exact US taxation they were trying to avoid. Our international tax advisory team has navigated this process for families from more than forty countries, and in every case, the pre-immigration planning window representing the highest return on investment of any single tax engagement we conduct.

Treaty Network Optimization: Eliminating Double Taxation at the Source

The United States has negotiated income tax treaties with more than sixty sovereign nations. These treaties are extraordinarily detailed legal instruments that govern how specific categories of income — dividends, royalties, business profits, pensions, capital gains — are allocated between the two taxing jurisdictions. An advisor who does not understand the technical nuances of the specific treaty applicable to a client's situation will leave substantial money on the table every single year.

For instance, the US-UK treaty contains a specific provision allowing US citizens residing in the United Kingdom to elect to be treated as UK residents for treaty purposes in limited circumstances, enabling efficient structuring of dual-resident income flows. The US-Germany treaty has unique sourcing rules for royalty income from intellectual property that create planning opportunities that do not exist under the US-Netherlands treaty. Without a practitioner who has studied these instruments in depth, you are navigating a body of international law that can protect or expose millions of dollars of income annually, using only a generalist's blunt instrument instead of a scalpel.

Controlled Foreign Corporations (CFCs): Navigating Subpart F and GILTI

If a US person owns more than 50% of a foreign corporation — which is incredibly common for entrepreneurs who have built international businesses — the IRS automatically classifies that entity as a Controlled Foreign Corporation (CFC). The implications are severe. Certain categories of income generated by the CFC — what the code calls Subpart F income — are taxed to the US shareholder immediately, in the current year, even if the corporation never distributes a single dollar to the owner. Investment income, royalties from related parties, and certain sales income are all swept into this immediate inclusion regime.

Layered on top of this is the Global Intangible Low-Taxed Income (GILTI) regime, a punishing minimum tax on foreign corporate profits aimed at preventing multinational companies from sheltering intellectual property income in low-tax jurisdictions. Together, these two regimes can tax income that has never touched American soil at rates approaching 50% when combined with the Net Investment Income Tax. Strategic use of the Section 954(b)(4) high-tax exception, the GILTI haircut elections under Section 250, and the Qualified Business Asset Investment (QBAI) deduction can substantially reduce this exposure for the right client profiles — but only when deployed by an advisor who has mastered the mechanics of international corporate tax law. Our foreign income specialists address these complex CFC compliance obligations head-on.

US Expatriation: The Exit Tax and Covered Expatriate Status

When a US citizen or long-term permanent resident decides to renounce citizenship or relinquish their Green Card, the IRS imposes a devastating Exit Tax under Section 877A. If you qualify as a "covered expatriate" — which occurs when you have a net worth exceeding $2 million, average annual net tax liability exceeding $201,000 over the prior five years (adjusted annually for inflation), or have failed to certify tax compliance for the past five years — you are deemed to have sold every worldwide asset on the day before expatriation at fair market value. The resulting mark-to-market gain is taxed immediately, creating a massive forced recognition event on assets that may be entirely illiquid.

Proper exit planning, executed well in advance of the renunciation date, can dramatically reduce this exposure. We identify strategies to accelerate basis step-ups on appreciated assets, maximize use of the $866,000 per-expatriate exclusion (adjusted annually), and restructure asset ownership to reduce the mark-to-market calculation before the exit date is triggered. The planning window is finite and irreversible — you cannot undo an expatriation once it is executed — making this one of the highest-stakes engagements in international tax practice.

IRS Offshore Compliance: Coming Clean Without Catastrophic Penalties

For families who have inherited offshore accounts, received foreign gifts improperly, or simply been unaware of their FBAR and FATCA obligations concerning foreign financial assets, the IRS has created multiple disclosure programs that allow taxpayers to come into compliance without facing the most severe criminal and civil penalties. The IRS Streamlined Filing Compliance Procedures — available in both domestic and offshore variants — allow non-willful violators to file three years of amended returns and six years of FBARs while paying only a 5% miscellaneous offshore penalty (or zero penalty for the offshore variant). However, the non-willfulness determination is a complex legal analysis that must be supported by a robust sworn certification narrative, and getting it wrong can expose a taxpayer to the full 50% FBAR penalty or worse.