Private Client & Offshore Services, Kozusko Harris Duncan updates


Contributed by Kozusko Harris Duncan
Preparing US tax and information returns: Forms 3520 and 3520-A
  • USA
  • 20 February 2020

The Internal Revenue Service (IRS) is ramping up compliance initiatives targeting failures to file US tax and information returns. US tax attorneys and accountants are increasingly seeing IRS notifications and penalty assessments. As the new year begins, family advisers and trust officers should review succession planning structures to determine whether any entity or individual has a 15 April US reporting requirement.

Overview (January 2020)
  • USA
  • 16 January 2020

US gift, estate and generation-skipping transfer tax exemption amounts have been updated for tax year 2020. Advisers to international families must be able to recognise when a family member has come in contact with the US tax net and plan accordingly. For family members domiciled in the United States, special attention should be paid to the estate tax exemption amount which is scheduled to be automatically reduced at the end of 2025.

Completing US tax forms: Form SS-4 – Application for Employer Identification Number
  • USA
  • 19 December 2019

Non-US entities, even when not conducting a business in the United States, must sometimes apply for a US tax identification number, known as an employer identification number. Properly completing Form SS-4 will result in smoother processing and support the entity's tax classification and residency position.

Should offshore trusts stay offshore – the long-term trust solution
  • USA
  • 01 August 2019

The tax drag and unsatisfactory options to deal with accumulated income often result in moving an offshore trust to the United States and giving up the tax deferral. However, there is an alternative method, suitable for very long-term trusts, that takes an almost diametrically opposite approach. Rather than restricting the US beneficiaries to the value of the original trust capital and virtually giving up on future tax deferral, this method sacrifices the original trust capital to a final payment of taxes and interest (or a gift to charity) and tries to maximise the duration of the deferral.

Should offshore trusts stay offshore – the problems
  • USA
  • 25 July 2019

US beneficiaries of foreign trusts are subject to a throwback tax regime and an interest charge when they receive distributions of accumulated income from the trust. To avoid these punitive payments, families often choose to convert or decant the trust to a US domestic trust. However, the easy answer may not be the best answer, as a trust that tries to rebound from an ill-considered move to the United States may face a tax on the way out – a toll charge that precludes returning offshore.

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