Cross-Border Estate Planning After Tax Reform: New Opportunities and Obligations

Expanded Definitions of U.S. Shareholders, Deemed Repatriation for Trust Holdings, Restructuring Entities for Tax Minimization

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Wednesday, April 25, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE program will provide estate planning counsel with a critical early look at the international implications of the new U.S. tax reform law on clients with cross-border assets and tax residence. The panel will offer guidance on examining and restructuring estate and trust documents for U.S. taxpayers to ensure that current wealth transfer plans conform with the provisions of the new law. The webinar will also address offshore business structures to determine whether a U.S. taxpayer with offshore holdings may achieve income tax benefits by restructuring those entities.

Description

The recent tax overhaul Act represents the most sweeping set of changes to the U.S. income tax code in over 30 years, and will have a particularly dramatic impact on tax planning and compliance of U.S taxpayers with cross-border assets, as well as foreign taxpayers with U.S. assets. The Act also provides additional opportunities for U.S. estate planning. Private client counsel and advisers must grasp the implications of the new law on any client with cross-border assets and activities, including interests in foreign companies and trusts.

In the offshore context, the Act sets a new framework for the treatment of foreign-sourced income received by U.S taxpayers, adopting a territorial tax regime while enacting a "deemed repatriation" requirement to end prior deferral benefits for U.S. shareholders of foreign business entities. The Act also significantly expands the base of cross-border income that will be subject to current U.S. taxation and certain information reporting obligations imposed on U.S. persons. There may also be significant tax implications to U.S. beneficiaries of trusts with interests in foreign entities.

Some of the changes contained in the law create potential opportunities for inbound investments and business activities. Entrepreneurs and investors will want to investigate the optimal structure for their interests given the permanent lowering of the corporate tax rate and the new pass-through income deduction. The permanent lowering of the corporate tax rate may make the use of foreign "blocker" corporations to hold U.S. real estate a more tax-efficient vehicle than under the prior regime, whereas the new pass-through income deduction may be advantageous for closely-held companies with active businesses. Counsel to non-U.S. persons seeking to invest in U.S. assets including U.S. real property should determine whether clients can achieve tax savings through a blocker corporation.

Due to the changes in foreign anti-deferral rules for U.S. individuals and trusts with offshore holdings, as well as offshore structures established for the benefit of U.S. persons, tax and estate planners should be prepared to examine the tax effectiveness of existing trust structures and to re-organize holdings in the United States as well as offshore to avoid unexpected tax consequences.

Listen as our experienced panel provides a critical first look at the cross-border implications of the tax reform law.

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Outline

  1. Key provisions and changes impacting entrepreneurs and inbound investors
    1. Lower tax rates for corporations and individuals
    2. Pass-through income deduction
    3. Estate and gift tax exemption
  2. Impact on outbound activities of U.S. persons
    1. Participation exemption – limited territorial regime
    2. Deemed repatriation – transition toll tax
    3. Modifications of subpart F provisions
    4. Global intangible low tax income (GILTI)
  3. Impact on inbound activities of foreign persons
    1. Sale of partnership interest
    2. Foreign blocker corporations under new corporate tax rate
    3. New ESBT rules involving nonresident shareholders of S corporations
  4. Impact on offshore vehicles established for U.S. beneficiaries
    1. Changes to attribution of ownership rules
    2. Potential structures for tax and reporting minimization

Benefits

The panel will review these and other key issues:

  • How does the new tax law create the possibility for taxable “phantom income” for U.S. trusts with offshore assets?
  • What impact will the permanent reduction in the U.S. corporate income tax rate have on non-U.S. persons and trusts holding U.S. real estate assets?
  • What changes does the new law make to nonresident beneficiaries of ESBTs holding ownership interests in S corporations?
  • How does the elimination of the “30-day rule” governing Controlled Foreign Corporation (CFC) status impact current and prospective estate planning structures?

Faculty

Lee, Lucy
Lucy S. Lee

Shareholder
Greenberg Traurig

Ms. Lee focuses her practice on international tax and estate planning for individuals and families. She represents high...  |  Read More

Lipoff, Lawrence
Lawrence M. Lipoff, CPA, TEP, CEBS
Director
CohnReznick

With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private...  |  Read More

Lo, Alvina
Alvina H. Lo
Chief Wealth Strategist
Wilmington Trust

Ms. Lo oversees the wealth planning, strategic advice and thought leadership services for the firm’s fast-growing...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

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CPE Not Available

$297