Invest Offshore to Avoid Tax

04 Oct

Invest Offshore to Avoid TaxQUESTION: I have just left my company and I have $175,000 in my savings and investment account.Is there any way to transfer that money in an offshore account to grow for the next 15 years, to avoid my heavy tax burden when that money is drawn out? I am new to this, and with my low amount I need to capitalize on it to the maximum potential.

REPLY: You did not state whether those funds are in an IRA or other tax deferred retirement savings account. If they are, I don’t know of any legal way to avoid paying taxes on distributions after you reach retirement age.

For assets that are not in a tax deductible IRA or similar savings account, I only know of two legal ways to invest assets offshore without having to pay tax on the income as it is earned. One way is with an offshore tax deferred annuity. The other is with an offshore life insurance policy. Most other offshore investments are taxed the same as similar U.S. investments — with some exceptions such as foreign mutual funds.

There are a variety of legal ways to minimize taxes on investment income within the U.S. or outside the U.S. I have just completed a final draft of an update of my book on “Legal Ways to Save Taxes Offshore and Onshore”. It’s not ready to release yet because it has not yet been reviewed by my co-author. Hopefully, it will be ready for release by the end of this month.

Meanwhile, Offshore Tax Strategies was released early last month and it includes a description of the tax treatment of most kinds of offshore investments. See

Vern Jacobs

Photo credit: Changhua Coast Conservation Action via / CC BY-NC-SA

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