Under the scheme – which is effectively a Malta-registered international pension plan – any capital growth of assets held inside the plan, as well as some withdrawals from it, may be entirely free from US tax, according to Chase Belgrave.
There are also no upper contribution limits, and the plan may be maintained upon return to the United States, the company said.
The plan being offered by Chase Belgrave is based on an existing pension plan for US expats provided by an external trustee, but it comes with a package of benefits, including what Chase Belgrave founder and director Justin Harris said is “full compliance with IRS reporting procedures, and the ability to buy into both US and foreign assets in a fully tax-compliant manner”.
This includes the ability to invest in “PFICs” (passive foreign investment company, a type of non-US investment) with no punitive tax charges, and the option to make lump sum or regular contributions from after-tax earnings.
Clients may continue to contribute to the scheme even if they return to the US, Chase Belgrave said. They may begin to take benefits at age 50, and must have begun to take them by age 70.
As reported, many US expatriates report that they are being told by the institutions that have been looking after their tax-deferred US retirement accounts, in some cases for decades, that they must move them because these institutions no longer wish to do so. Typically they cite the difficulties and expense of looking after clients who live abroad.
