Expanded Worldwide Planning-EWP & Privacy

Private Placement Life Insurance (PPLI) in Action

Part 1: Privacy

Download PDF

The universality of Expanded Worldwide Planning (EWP) is not to be denied. This is objectified by Wikipedia. In the first sentence of their page on International Tax Planning, Expanded Worldwide Planning (EWP) is featured.
We are taking a cue from Wikipedia. Over the next few weeks, we will feature one of the six principles of Expanded Worldwide Planning (EWP). The six principles are: privacy, asset protection, tax shield, succession planning, compliance simplifier, and trust substitute.
Today we feature PRIVACY. Privacy is a key element. With FATCA, CRS, and Registers of Beneficial Ownership our clients are looking for ways to keep their affairs private, and still be compliant with tax authorities worldwide. But as you know, it is a cat and mouse game that takes study and constant attention to detail. As you can see from our image, we don’t quite know who is winning.

Read the full article in our partner website

 

by Michael Malloy, CLU TEP RFC, @ Advanced Financial Solutions, Inc

Michael Malloy-CLU-TEP

 

 

 

#michaelmalloy #PPLI #privateplacement #lifeinsurance #advancedfinancialsolutions

 

 

 

 

Privacy and the Paradise Papers

The “New Switzerland” Revisited

The right to privacy is enshrined in the formal pronouncements of government bodies throughout the world. The Paradise Papers, and previously the Panama Papers, demonstrate that in practice, this right to privacy receives very different interpretations. These two data hacks reveal the conflict between tax authorities’ right to tax and citizens’ fundamental right to privacy.

How one thinks about this conflict is of course dictated by how it is discussed. Most people receive their information from the various media outlets. Depending on whom you listen to, you will receive very different interpretations of the documents that have been put forward to the public.

As quoted in the New York Times this week, Ross Delston, a Washington D.C.-based anti-money-laundering expert, said, “What we learned confirms what we always suspected: That the use of offshore companies is more widespread than ever imagined. Offshore financial centers are useful not just for crooks, oligarchs and politically exposed persons but also to the largest global companies and highest net-worth individuals.”

Mateo Jarrin Cuvi in his October 27, 2017 post on Taxlinked, “Data Protection Takes Hit with Bermuda Hack,” quotes the Cayman Compass in reference to the Panama Papers, “In recent years we have witnessed the emergence of a different sort of “investigative journalism” that largely includes the public dumping of private information, oftentimes in the absence of analysis, context or verification. It is journalism most foul.”
Two opposing views indeed!

Privacy Moves to the United States?

Another practical demonstration of the conflict between government taxation and citizens’ fundamental right to privacy is what some have termed the “New Switzerland.” This is the movement of funds previously placed in locations like Switzerland and offshore jurisdictions to the United States.

To continue our theme of contrasting viewpoints, below are quotes on tax avoidance. The first is by the Tax Justice Network, and the second by Learned Hand, a U.S. Federal Judge from a 1934 case, Helvering v. Gregory. The attitude expressed by Learned Hand is prevalent in the U.S., while the OECD champions the attitude in the Tax Justice Network quote that is in reference to the Paradise Papers.

“Just because no one is put in jail, doesn’t mean no one has committed a crime. All that said, just because a prosecuting authority doesn’t bring charges, it doesn’t mean that no crime has taken place.”

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”

No wonder the “New Switzerland” has come to pass!
One irony in this movement of funds to the U.S. is that the U.S. in effect began the movement of tax transparency with FATCA in 2008, which was closely followed-up with the OECD’s Common Reporting Standard (CRS). Some have brought their funds to the U.S. in structures that can be easily pierced by CRS.

There are structures that give privacy and significant tax benefits to international clients without moving family assets to the US merely to avoid CRS reporting. These structures also achieve tax compliance with tax authorities. Our firm specializes in these structures, and would be glad to discuss them with you in more detail.

We welcome your inquiries. Please Contact Us or write them at the bottom of the page.

Thank you!

Michael Malloy, CLU TEP, @ Advanced Financial Solutions, Inc