U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
http://www.bloomberg.com/news/2012-...s-told-go-away-as-tax-evasion-rule-looms.html
That’s what some of the world’s largest wealth-management firms are saying ahead of Washington’s implementation of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts. HSBC Holdings Plc (HSBA), Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. (DBS) all say they have turned away business.
“I don’t open U.S. accounts, period,” said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory attitudes toward U.S. clients as “Draconian.”
The 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. It means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which could affect their ability to generate returns.
“In the long run, if Americans have less and less opportunities to invest overseas, it would be a disadvantage,” Marc Faber, the fund manager and publisher of the Gloom, Boom and Doom report, said last month in Singapore.
“Most of the hedge funds I know in Asia won’t take American clients,” said Faber.
Bank of Singapore, the private-banking arm of Oversea- Chinese Banking Corp. (OCBC), ranked strongest in the world for the last two years by Bloomberg Markets magazine, has turned away millions of dollars from Americans because it doesn’t want to deal with the regulatory hassle, according to Chief Executive Officer Renato de Guzman. The bank had $32 billion under management as of the beginning of the year.
The definition includes citizens, green-card holders and non-Americans
deemed U.S. residents by being present in the country for at least 183 days over a three-year period, which makes them subject to U.S. tax on their worldwide income, according to the IRS.
Americans who don’t comply with Fatca are deemed “recalcitrant,” and income they receive from U.S. sources also is subject to a 30 percent withholding tax, said Jason Choi, a Singapore-based tax lawyer with Latham & Watkins LLP.
Renouncing citizenship is an option chosen by increasing numbers of Americans.
A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, the IRS reported.
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Not to worry, the poor will never leave the U.S. because they receive so many benefits.
Only the rich seem to be motivated to renounce their U.S citizenship and leave the country.
Money and wealth know no boundaries and like water, it seeks its own level flowing via the path of least resistance.
