Caymans Accord Makes it Tougher For Wealthy To Hide Money
- Published: 06 August 2013
You may have some money in the Cayman Islands, a lot of people do. Many wealthy Americans stash cash overseas to avoid scrutiny from the U.S. government in the Cayman Islands, among other places. Time to pay attention, folks, this secret hideaway for your money is about to become less secret.
An agreement between the Cayman Islands and the United States will put in place the Foreign Account Tax Compliance Act, or Fatca. Fatca will make it tougher to hide money overseas because foreign banks must report their accounts to the U.S. Internal Revenue Service or face, in some cases, a 30 percent withholding tax.
The accord is significant because the Cayman Islands is a major financial center and home to operations for dozens of banks, funds and wealth-management entities, according to Bloomberg BNA. Among major banks that do business in the Cayman Islands are the Royal Bank of Canada, HSBC Holdings Plc (HSBA), Bank of Nova Scotia, Bank of America and more.
Obviously, the core motivation for the accord is more revenue for the Feds. The Joint Committee on Taxation estimated in 2010 that the law would, over 10 years, generate more than $8.5 billion in tax revenues. The implications of Fatca are significant to any estate plan that includes assets housed or sheltered overseas. Read the complete articleby Alison Bennett as seen in Bloomberg Law online.
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-The Estate Planning Team
Rogers, Sheffield & Campbell