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" Did I really have to declare that to the IRS??? ". How to Come Back into the US Tax System. Town Hall Evening Dr Guillaume Grisel “Changes in the US Tax Laws: LL.M . (Cambridge), Ph.D ., T.E.P. How it impacts US Citizens Abroad” Attorney- at - law , Bonnard Lawson.

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did i really have to declare that to the irs

"Did I reallyhavetodeclarethattothe IRS???"

How to Come Back into the US Tax System

Town Hall EveningDr Guillaume Grisel

“Changes in the US Tax Laws:LL.M. (Cambridge), Ph.D., T.E.P.

How it impacts US Citizens Abroad”Attorney-at-law, Bonnard Lawson

swiss us estate planning in a nutshell

Swiss-US Estate Planning in a Nutshell

Pre-NuptialAgreements, Wills, Powers of Attorney, Etc.

For US Citizens Living in Switzerland

did i really have to declare that to the irs1

"Did I really have to declare that to the IRS???"

How to Come Back into the US Tax System

the available options
The available options

What the IRS wantsyou to do:

  • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12)

Or

  • "Streamlinedfiling" New StreamlinedFilingComplianceProcedures for Non-Resident U.S. Taxpayers(Sept. 2012)

Whatmany people do…

  • "Quiet" or "Silent" Disclosure
the available options1
The available options

What the IRS wantsyou to do:

  • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12)

Whatmany people do…

ovdp what you have to pay
OVDP: What you have to pay
  • 8 years income tax + interests
  • Tax penalties
      • Accuracy-related penalties (20% of tax due)
      • Failure to file/pay penalties (up to 25% of tax due each)
  • FBAR penalty!
      • 27.5% of highest value of each offshore account during the 8 last years (!!!)

Can be reduced to 12.5% or even 5% in some (rare) cases

  • Your lawyer and your CPA…
ovdp up down sides
OVDP: Up & down sides

Upsides

  • Quasi-assurance of no criminal prosecution
  • Predictability of tax and penalties due

Downsides

  • High penalties (in particular FBAR penalty)
  • Thorough audit by the IRS
  • High professional fees (CPA, lawyer)
the available options2
The available options

What the IRS wantsyou to do:

  • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12)

Or

  • "Streamlinedfiling" New FilingComplianceProcedures for Non-Resident U.S. Taxpayers(Sept. 2012)

8

streamlined filing up down sides
Streamlined filing: Up & down sides

Upsides

  • Cheap and simple
    • 3 yearstaxonly (+ 6 years FBAR)
    • No penalties (onlyinterests)
    • Lowerprofessionalfees

Downsides

  • Very restrictive eligibility conditions
    • Non-residentsince 1st January 2009
    • No return filedsince 2009
    • Max. $1500 /year due to the IRS
    • Lowlevel of compliancerisk
  • Lack of predictability: no assurance about criminalprosecution and penalties
  • All submissionsreviewed by the IRS

9

the available options3
The available options

What the IRS wants you to do:

  • "OVDP" Offshore Voluntary Disclosure Program (2009  11  12)

Or

  • "Streamlined filing" New Filing Compliance Procedures for Non-Resident U.S. Taxpayers (Sept. 2012)

What many people do…

  • "Quiet" or "Silent" Disclosure

10

quiet disclosure up down sides
« Quiet disclosure »: Up & down sides

Upsides

  • Relatively cheap and simple (if accepted by the IRS…)
    • 6 yearstaxreturns and FBARs
    • Failure to file/pay penalties but no FBAR penalty
    • Lowerprofessionalfees
  • Generally no review by the IRS (but…)

Downsides

  • Not consistent with IRS rules no assurance about criminalprosecution and FBAR penalties

11

which way to pick
Which way to pick?

If you are in this situation…  Considerthisway…

  • Eligible for Streamlinedfiling Streamlinedfiling
  • US resident OVDP
  • Sophisticated offshore tax planning  OVDP
  • Very important tax due  OVDP
  • Risk of exchange of information  OVDP
  • Other « high risk » situation  OVDP
  • Only FBAR are missing  File missing FBAR and explain
  • Other cases  ?

12

swiss us estate planning in a nutshell1

Swiss-US Estate Planning in a Nutshell

Pre-NuptialAgreements, Wills, Powers of Attorney, Etc.

For US Citizens Living in Switzerland

Dr. Guillaume Grisel

LL.M. (Cambridge), Ph.D., T.E.P.

Attorney-at-law, Bonnard Lawson

estate planning what for
Estate planning: what for?
  • Makesure yourassetswillbetransferred to the people youwant
  • Minimizethe taxburden
  • Makeyour relatives’ life easier by simplifying the estateprocedures
what will happen to my assets after my death
Whatwillhappen to myassetsaftermydeath?
            • 1. Division of the marital property
            • Betweenthe survivingspouse and the estate
  • 2. Division of the estate

Between the heirs (and the legatees)

  • + Taxes and expenses …
division of marital property
Division of marital property
  • Whatwillhappenif no planning isdone?
    • Whichlawwillapply? Swiss or US Law?
    • Law of the (last) common place of residence of the spouses.
    •  Swisslaw
    • How ispropertydividedunder the Swiss«default» regime?
    • Acquests sharing (Errungenschaftsbeteiligung, participation aux acquêts)
              • Assetsearnedduringthe marriage : split 50-50 «Acquests»
              • Assetsacquiredbeforethe marriage: not split
              • Gifts / bequestsreceivedduring the marriage: not split «Ownassets»

16

division of marital property1
Division of marital property
  • What are youralternative planning options?

By making a prenup / postnup, youcanchoosebetween:

    • Modifiedacquests sharing: The 50%-50% rulecanbechanged
    • Communityproperty(freedomas to whichassets are in or out of the community)
    • Separationof assets
    • US law if at least one spouseisUS
inheritance
Inheritance
  • Whatwillhappenif no planning isdone?
    • Whichlawwillapply? Swiss or US Law?

Law of the last place of residence of the deceased.

 Swisslaw

    • How isthe estatedividedunder the Swisslaw «intestacy» rules:
inheritance1
Inheritance
  • Whatare your alternative planning options?

By making a will or an inheritance agreement, youcanchoose to:

    • Modify the legalshares
    • Appoint new heirsForcedheirshiprights must berespected
    • Appoint legatees
    • Make an inheritance agreement
    • Give a usufruct to the survivingspouseOptions to « getaround » the forcedheirshiprights
    • Subjectyourestate to US law

Pay attention to the conditions and consequences!

      • Appointment of an executor!
      • Trusts are recognized in Switzerland
inheritance2
Inheritance

Legalshares of the heirsatlaw:

Forcedheirshiprights:

estate inheritance taxes
Estate / inheritance taxes
    • US citizens living in Switzerland are potentiallyexposed to:
  • US federalestatetaxIf estate and previous gifts exceed $ 5.25 millions
  • Swiss cantonal inheritancetaxThe Canton in which the deceasedhadtheir last place of residence
    • No inheritancetax in Schwyz
  • US state estatetax?Possibly ,if US domicile not lost (e.g. US lawwill)
  • Swissfederalinheritancetax? Maybe in the (near) future …
in case of incapacity the new swiss rules
In case of incapacity… the new Swissrules

Whatwillhappenif no planning isdone?

  • Whocanact on mybehalf in the daily life?
  • Guardianisappointed by the Court if:

- Individualcannotsafeguardhis/herinterests

- An urgent matter must besettled

  • Spouse or civil partnerhas limitedpowerswith respect to:
          • Legalacts: only if «usuallynecessary» to satisfy the needs
          • Assets:limited to «ordinary» management
          • Mail : only if «necessary»
  • Health care
in case of incapacity the new swiss rules1
In case of incapacity… the new Swissrules

Whatwillhappenif no planning isdone?

  • Whocanmakehealth-care decisions on mybehalf?

In order:

  • Guardian if he/shespecificallyreceivedthis power
  • Spouse or civil partner if they live in the samehousehold or if he/sheprovidespersonal assistance
  • Descendants
  • Parents if theyprovidepersonal assistance
  • Siblings
in case of incapacity the new swiss rules2
In case of incapacity… the new Swissrules

What are your alternative planning options?

  • Daily life  Power of attorney in case of incapacity
      • Freedom to appoint the attorney youwant
      • Freedom to define the scope of theirpowersin 3 possible fields
        • Personal assistance
        • Management of the assets
        • Representationtowardsthirdparties
      • Possibility to appoint different attorneys in differentfields
  • Health care  Advanced medical directives
      • Early instructions for physicians
      • Appointmentof a representative for health-care purposes
thank you very much for your attention
Thank you very much for your attention

Shouldyou have any questions…

  • Bonnard Lawson – International Law Firm

Me Guillaume GRISEL

Rue du Grand-Chêne 8

CP 5463

CH-1002 Lausanne

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