Fiduciaries

ATAS assists Trustees and beneficiaries with their foreign trust (Foundations and other entities) reporting requirements and other tax related filing responsibilities.

In general, U.S. persons and permanent residents (a/k/a “green-card” holders), even those living outside the United States, must report their worldwide income, and therefore are required to file certain U.S. tax and other informational returns unless exempt under very limited circumstances. Non-U.S. persons (a/k/a “non-resident aliens” or “NRAs”) may also be subject to U.S. taxation based on certain U.S. source income, investments, or business activities.

The ATAS team will provide you with the highest quality of professional advice and U.S. tax preparation, in order to complete and timely file your individual income tax returns and other tax related documents.

If you are not a U.S. person and have U.S. income or U.S. tax related issues ATAS will help analyze your U.S. tax situation. Please also ask us about how ATAS deals with issues related to Switzerland’s Pillar 2 and Pillar 3 pensions and withholding tax.

IN THIS REGARD, THE TRUSTEE SHOULD CONSIDER THE FOLLOWING

PLACES OF RESIDENCE

Both past and current places of residence, domicile and citizenship for each and every Grantor and Beneficiary of the Trust, and whether any change to the current status of the Grantor or Beneficiary is anticipated.

THE TRUST’S STATUS AS A FOREIGN GRANTOR TRUST OR A FOREIGN NON-GRANTOR TRUST

Whether the Trust is considered to be a Foreign Grantor Trust and/or a Non-Grantor Trust for U.S. federal income tax purposes.

THE INCOME, ESTATE AND GIFT TAX CONSEQUENCES FOR THE GRANTOR AND U.S. BENEFICIARIES

These types of tax consequences need to be considered on occasions in which there are (i) certain powers or rights in connection with the Trust or the entities owned by the Trust and conferred on the Grantor or the beneficiaries; (ii) transfers of property to the Trust whether direct or indirect, (iii) direct/indirect actual or deemed distributions or loans from the Trust and (iv) rights to potentially benefit from the Trust.

THE MANNER IN WHICH THE ENTITIES OWNED BY THE TRUST SHOULD BE ADMINISTERED

Trustees should consider how to administer the entities which the Trust owns in a tax-efficient manner. For example, how to deal with assets which appreciate and retained earnings, as well as when to make a “check-the-box election”.

ANY CHANGES WHICH NEED TO BE MADE TO THE TRUST DOCUMENTS

Trustees should consider what changes need to be made to the Letter of Wishes; the Trust Deed; and/or any entities owned by the Trust to ensure that the Trust is structured in a manner that is tax efficient. As examples of the types of issues that Trustees need to be on the look out for: a “general power of appointment” of a U.S. person; and the existence of a “step-up in basis” upon the death of the Grantor.

By conducting a due diligence along the lines outlined above, Trustees will be in a relatively good position to ascertain if there are any U.S. taxation and reporting issues in the administration of their trusts.

This due diligence check list is merely a tool to assist Trustees in the administration of their trusts, but given the complexity of the issues highlighted above, will often require further analysis by qualified U.S. Counsel. The attorneys at Anaford Tax & Accounting Services are familiar with these issues and should be consulted in order to ensure that all relevant U.S. issues are canvassed by Trustees in administering their trusts.

RENUNICATIONS

Whether any Grantor or beneficiary of the Trust ever renounced their U.S. citizenship or relinquished their Green Cards.

WHAT REPORTING REQUIREMENTS THERE ARE AT BOTH FEDERAL AND STATE LEVELS FOR THE TRUSTEE, GRANTOR OR BENEFICIARIES

The nature of the reporting requirements, if any, of the Trustees, the Grantors and the beneficiaries at both state and federal levels. For example, compliance with the Foreign Accounts Tax Compliance Act (FATCA) and the application of Forms 3520, 3520-A, 8621, 5471, 1040, 1041, 8858, 926, 706 and 709 and Treasury Department Form FinCen 114 (FBAR).

THE MANNER IN WHICH ADDITIONS TO THE TRUST ARE MADE

Trustees, Grantors and beneficiaries should be mindful of this issue so as to minimize adverse tax and reporting requirements.

WHICH TYPES OF INVESTMENTS SHOULD BE HELD DIRECTLY OR INDIRECTLY BY THE TRUST

Trustees should consider which types of investment structures should be held directly by the Trust or indirectly through an entity.

THE STATUS OF THE TRUST FOR FEDERAL TAX PURPOSES

Whether the Trust is considered to be a foreign Trust for federal tax purposes and the circumstances under which that may change.

WHO THE GRANTOR OR OWNER OF THE TRUST’S ASSETS IS

Who, both currently and in the past, has been considered Grantor of the Trust and who, both currently or in the past, has been considered the owner of the assets of the Trust and under what circumstances that might change.

POSSIBLE TAX LIABILITIES FOR THE TRUSTEE

Trustees should consider to what extent they could be held liable for federal withholding tax or federal and state transfer taxes (for example, estate and gift taxes).

WHAT DOES THE TRUSTEE OF A NON-U.S. TRUST NEEDS TO PROVIDE A U.S. BENEFICIARY?

If a U.S. person receives a distribution from a foreign trust, the distribution will have to be reported on the taxpayer’s Form 3520 and tax return statement called Foreign Grantor and Nongrantor Trust Beneficiary Statements. Those statements ensure that the distribution is properly taxed.

FATCA

The Foreign Account Tax Compliance Act (“FATCA”) is U.S. legislation aimed at combating tax evasion by U.S taxpayers through the use of non-U.S. accounts and assets. To achieve this main, FATCA generally requires non-US financial institutions to identify and report certain information concerning their U.S. account holders or else suffer a 30% withholding tax. Although FATCA is U.S. law, many non-U.S. jurisdictions have entered into so-called “intergovernmental agreements” (“IGAs”) with the U.S. to facilitate the local implementation of FATCA and thereby require resident financial institutions to comply with FATCA. As a result, FATCA is now part of the tax and information reporting framework of many jurisdictions. In addition, FATCA has engendered other information reporting regimes, including the UK “FATCA” Agreements with the Crown Dependencies and Overseas Territories and the OECD Common Reporting Standard (“CRS”). These other reporting regimes are substantially based on FATCA Model 1 IGA.

We provide a full array of services

  • DETERMINING FATCA STATUS OF ACCOUNTHOLDERS AND PAYEES
  • ASSISTING WITH COMPLETION OF SELF-CERTIFICATION FORMS, E.G., IRS FORM W-8BEN-E AND IRS FORM W-8IMY, OR SUBSTITUTE THEREOF, AND WITHHOLDING STATEMENT
  • IDENTIFYING U.S. ACCOUNTS OR U.S. REPORTABLE ACCOUNTS
  • IDENTIFYING SUBSTANTIAL U.S. OWNERS AND U.S. CONTROLLING PERSONS
  • ASSISTING WITH THE PREPARATION OF IRS FORM 8966 OR EQUIVALENT FATCA RETURN OR REPORT OF MODEL 1 IGA JURISDICTIONS AND TRANSMISSION VIA THE INTERNATIONAL
  • DATA EXCHANGE SERVICE (“IDES”)
  • DEVELOPING AND REVIEWING FATCA COMPLIANCE PROGRAMS
  • TRAINING IN CORE FATCA CONCEPTS AS WELL AS PROVIDING RELEVANT UPDATES ON NEW FATCA DEVELOPMENTS AND CROSS-OVERS WITH UK AGREEMENTS AND OECD CRS
Contact Us