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  • Emily A. Georgiades, Esq.

How Non-U.S. Persons Can Safeguard Their Security and Confidentiality Via APTs.

Practically every country offers trust services as a means to protecting assets but Asset Protection Trusts (“APTs”) in the United States are unique in that non-U.S. persons who use an APT can legally avoid reporting their assets under the Foreign Account Tax Compliant Act (“FATCA”) and the Global Account Tax Compliance Act (“GACTA”). These Inter-Governmental Agreements (“IGA’s”), have been entered into by the United States and almost every other country in the world but they involve unequal exchanges of information. That is to say that the U.S. receives more information than what it sends (for example, about beneficial ownership data).


As such, it effectively makes the United States a kind of “tax haven”. Moreover, although GATCA requires the reporting of certain information about non-U.S. persons to their signatory countries, the U.S. does not seem likely to sign-up to GATCA anytime soon making it easy for non-U.S. persons to maintain their confidentiality when it comes to their assets in an APT. This is because most of the data that GATCA requires the U.S. to exchange is not reported by the U.S. financial institutions to the U.S. tax authorities- so, it cannot give information it does not collect.


According to the Internal Revenue Code and the U.S. Treasury Regulation, under FACTA, the U.S. government will not disseminate any information regarding:


a) depository accounts (i.e. cash accounts) held by entities (even entities in FATCA partner countries),


b) non-cash accounts, or


c) the controlling persons of any entities (whether the controlling person are from the reciprocal partner country or from third countries, and even if those entities are owned or controlled by residents of the reciprocal partner country).


It must be noted that using these IGA’s to evade taxes is illegal and therefore not condoned, but they can be used to legally safeguard your security and confidentiality. This is especially desirable if you want to include in the Trust non-cash items such as passwords/passcodes (i.e. including the “keys” that belong to your wallet which houses crypto). You can keep almost anything in your Trust and even put real estate in a Trust.


To learn about how a non-U.S. person to avoid having to disclose cash accounts or non-cash accounts under a reciprocal IGA with the U.S., contact our lawyers at Emily@eaglaw.co Our lawyers are further able to consult you on what you can include in a Trust personally tailored to you or your clients’ needs and how a U.S. Trust can safeguard your confidentiality.


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© 2023 by E.A. Georgiades & Co  LLC. Attorney advertising. Previous outcomes do not guarantee same results.

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