Tax History and PPLI

EWP: The Past Comes Home to the Present

 With the current emphasis on tax transparency, we will briefly examine the history of taxation and how it correlates to our specialty:  how international families can pay less tax and still be compliant with tax authorities.  Expanded Worldwide Planning (EWP) uses a properly structured Private Placement Life Insurance (PPLI) policy to achieve this aim.

We show you this beautiful image of Hatshepsut’s temple in Egypt, because the first known records of taxation occur there. Of course, the modern tax codes of our time did not exist then, nor did PPLI.

In its best sense, governments tax their citizens to pay for services that they cannot easily provide themselves like roads, fire protection, and security. With our global economy and modern freedom of movement governments are now grappling with taxation issues for families and companies that span over the entire globe, not just within their borders.

We are a proponent of EWP which solves many issues for families by creating simple structures using PPLI that give tax savings, along with tax compliance. One aspect of our structures that give families these valuable traits is in-kind premium payments.  Since we use insurance companies based in jurisdictions that accept in-kind premium payments, families can contribute their companies in lieu of the usual cash that is required.

PPLI is a bespoke product that is tailored made for families.  Many asset classes can become tax-advantaged under this worldwide, tax-favored umbrella that we craft for them.  In the U.S. it is popular to use PPLI mainly for securities, mostly ones that can generate high taxes like hedge funds.  In using EWP for international families, we use structures that are flexible and easily adaptable to the worldwide holdings of these families. Since these structures usual contain multiple asset classes like companies, valuables, and collectibles, and not just securities.

Now back to the history of taxation.  Courtesy of Wikipedia , “Tax,” and “Taxation in the United States,” we give you some interesting facts to reflect upon:

–”The first known system of taxation was in Ancient Egypt  around 3000–2800 BC in the First Dynasty of Egypt of the Old Kingdom of Egypt.”


–”Records from the time document that the Pharaoh would conduct a biennial tour of the kingdom, collecting tithes from the people. Other records are granary receipts on limestone flakes and papyrus.”


–”Effective tax rates were higher in Britain than France the years before the French Revolution, twice in per capita income comparison, but they were mostly placed on international trade. In France, taxes were lower but the burden was mainly on landowners, individuals, and internal trade and thus created far more resentment.”


–”Historically, taxes on the poor supported the nobility; modern social-security systems aim to support the poor, the disabled, or the retired by taxes on those who are still working.”


–”The first federal income tax [in the United States] was adopted as part of the Revenue Act of 1861. The tax lapsed after the American Civil War. In 1913, the Sixteenth Amendment to the United States Constitution was ratified, permitting the federal government to levy an income tax on both property and labor.”

As the saying goes, “There is no certainty like death and taxes.”  We cannot assist you with the former, but if you are an international family and wish to explore how your holdings can become tax compliant by using PPLI, and at the same time have tax-deferral and a tax-free death benefit, we are here to assist you in this effort.


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

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