Heightened tension surrounding the state of U.S immigration may be making national headlines, but high-net-worth individuals immigrating to the United States face a unique challenge. The U.S. uses a citizen-based tax system, and residence-based tax system. A citizen-based tax system taxes all income earned by a citizen, in the U.S. or outside the U.S. The residence-based system taxes worldwide income of those individuals who are residents in the U.S. In addition, the U.S. imposes a 40% estate tax on worldwide property. This comes as a shock to foreign investors immigrating to the U.S.
For a wealthy foreigner moving to the United States, failure to consider the impact of residency on an individual’s taxes could be disastrous. At Aliant Law, our California based wealth management, tax management, asset protection and immigration oriented law firm can help people take the appropriate preemptive measures that can also yield insight into what to expect.