Moving Your Money Overseas

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Depending on how concerned you are regarding the safety of your financial assets should the government get more aggressive in taxing the wealthy, there are some strategies for getting you money out of the country.

            The first and simplest is to open a small account in a foreign bank.  It is reportable to the IRS but if less than $10,000 avoids more detailed annual reports.  This can act as a sort of backup in a worse case scenario.  You may never need it; but if you do, it is in place and can be accessed immediately if you decide to move even greater sums.

            A corollary to this is to store physical gold or silver in a safety deposit box of a foreign bank.  You can store an unlimited amount without reporting, although all the steps that you take to get that gold into the safety deposit box are reportable.  Since our Portfolio strategy incorporates a decent size holding in gold, this strategy fits nicely.

            Another measure is to buy a variable annuity from a foreign company.  The annuity can be invested in foreign currencies, stocks and bonds; and if over $1 million just about anything else.  It is likely that if exchange controls were imposed, the annuity would not be impacted which is not true of a simple bank account.  When you buy one, it is subject to a 1% excise tax and it is reportable as a foreign financial account.

            On the other hand, a Swiss annuity isn’t reportable as a foreign financial account nor is it subject to the 1% excise tax.  However, the income you receive is reportable.

Of course, there is a multitude of mutual funds available internationally. However,  they come with certain tax disadvantages, and they are reportable as a foreign financial account.

A direct investment in foreign real estate is free of any special U.S. tax or reporting rules and it is unlikely that any foreign exchange controls would touch existing foreign real estate investments.  In addition, foreign real estate offers peace of mind in a worse case scenario. Knowing you have a place to go provides a sense of security.

I need a disclaimer here: I have only touched on the available alternatives.  When, as and if you decide to pursue any of them, you need to check with your lawyer and accountant.  Finally, I am not recommending any of them.  This simply to outline potential strategies for you to consider.

I relied on Terry Coxon of Casey Research for much of the above information

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.
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