Tag Archives: hybrid trust

Tax Planning Tricks of Cross-Border Tax Accountants (CPAs)

Just how do cross-border tax accountants (usually a CPA or Chartered Accountant) use different nations tax laws to legally avoid taxes?

One term you will see on the internet is “hybrid” such as a hybrid company or a hybrid trust.

The USA is the biggest source of hybrid companies.   I am sure you have heard of them; they are known as limited liability company (LLC).    Only in America, the tax authorities (the IRS) treats the LLC as non-existing.  Yep, the single member LLC does not file a tax return.  It is completely invisible.

Meanwhile, Europe and even Mexico has complained to the U.S.  The Panama Papers disclosed that the Wymoing LLC is the most invisible tax haven company on the planet.   For example, if a French person owns a Wyoming LLC his government will never know.  Yet, this company can do worldwide cross-border business.  It can open U.S. and foreign bank accounts.

Hybrid Trusts are usually created in Nevada.  Cross-border accountants know that trusts only exist in form British colonies.  Yep, that includes America.   For reasons the baffle many, the U.S Department of the Treasury issued regulations that allow a Nevada trust to be taxed (in the U.S. and only the U.S) as a foreign trust.  Yep, it is as if the Nevada trust is in a  foreign (non-existing) country.

This allows the cross-border family to avoid inheritance tax in their home country and estate and income tax in the U.S.  Below is a fifteen minute audio of my radio show  (BlogTalk Radio Show; see just below my picture, above) on the Nevada Tax Haven Trust.

By the way, the corporate trustee fee is usually $2,500 per year.