Financial Strategy for temporarily moving out of USA

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zester
Posts: 2
Joined: Fri Jun 01, 2018 1:32 pm

Financial Strategy for temporarily moving out of USA

Post by zester » Fri Jun 01, 2018 2:17 pm

Hi All,
This is my first post in the forum, so please excuse any mistakes that I make.
Currently, I am residing in USA and I am not a US Citizen but working with a US based company on work visa. I have investments in Betterment (2 taxable accounts), Robinhood (some stocks) and Fidelity (current employers RSUs in brokerage account and 401(k)). Due to some personal reason I am planning to move to Ireland for about 2 years with the same employer (they have an office in Ireland) and will be moving back to US after that. I also have some friends and family members who reside in USA so incase I need a valid mailing address, I have that too. I checked with betterment and robinhood but they don't allow accounts to be active if the person is not residing in the USA, but since Fidelity account is via my employer, they will allow me to keep the account active. Personally, I would like to keep my investments in US without selling them. Do people here have experience with such situations and what do you guys recommend I do?

Thanks
Mo

Nate79
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Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Financial Strategy for temporarily moving out of USA

Post by Nate79 » Fri Jun 01, 2018 2:59 pm

zester wrote:
Fri Jun 01, 2018 2:17 pm
Hi All,
This is my first post in the forum, so please excuse any mistakes that I make.
Currently, I am residing in USA and I am not a US Citizen but working with a US based company on work visa. I have investments in Betterment (2 taxable accounts), Robinhood (some stocks) and Fidelity (current employers RSUs in brokerage account and 401(k)). Due to some personal reason I am planning to move to Ireland for about 2 years with the same employer (they have an office in Ireland) and will be moving back to US after that. I also have some friends and family members who reside in USA so incase I need a valid mailing address, I have that too. I checked with betterment and robinhood but they don't allow accounts to be active if the person is not residing in the USA, but since Fidelity account is via my employer, they will allow me to keep the account active. Personally, I would like to keep my investments in US without selling them. Do people here have experience with such situations and what do you guys recommend I do?

Thanks
Mo
While I understand many people try to get around the rules by fraudulently listing their personal residence as that of a friend or family but I wouldn't do it. Do you really want to risk your account in the case something goes wrong and they found out you fraudulently listed someone else's address?

Have you investigated any brokers that offer international services such as Schwab?

zester
Posts: 2
Joined: Fri Jun 01, 2018 1:32 pm

Re: Financial Strategy for temporarily moving out of USA

Post by zester » Fri Jun 01, 2018 3:40 pm

Nate79 wrote:
Fri Jun 01, 2018 2:59 pm

While I understand many people try to get around the rules by fraudulently listing their personal residence as that of a friend or family but I wouldn't do it. Do you really want to risk your account in the case something goes wrong and they found out you fraudulently listed someone else's address?

Have you investigated any brokers that offer international services such as Schwab?
Thanks for the reply Nat79. I didnt investigate with Schwab, but since my employer already have Fidelity account, i checked with them and they said they will still keep the account active, it will just be in a restricted mode where I cannot trade mutual funds.
Do you know what are the implications if I list residence address that of my family ?

Nate79
Posts: 3321
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Financial Strategy for temporarily moving out of USA

Post by Nate79 » Fri Jun 01, 2018 7:26 pm

zester wrote:
Fri Jun 01, 2018 3:40 pm
Nate79 wrote:
Fri Jun 01, 2018 2:59 pm

While I understand many people try to get around the rules by fraudulently listing their personal residence as that of a friend or family but I wouldn't do it. Do you really want to risk your account in the case something goes wrong and they found out you fraudulently listed someone else's address?

Have you investigated any brokers that offer international services such as Schwab?
Thanks for the reply Nat79. I didnt investigate with Schwab, but since my employer already have Fidelity account, i checked with them and they said they will still keep the account active, it will just be in a restricted mode where I cannot trade mutual funds.
Do you know what are the implications if I list residence address that of my family ?
No I do not know the implications. Here is a long thread on the topic and no one agrees but at the end it is best to work with a brokerage than trick them.

viewtopic.php?t=110773

My fear would be if there were some type of fraud/theft in the account do you really want to test their policies when they find out you lied on your contract by reporting a false resident address to get around their rules?

TedSwippet
Posts: 1801
Joined: Mon Jun 04, 2007 4:19 pm

Re: Financial Strategy for temporarily moving out of USA

Post by TedSwippet » Sat Jun 02, 2018 4:33 am

zester wrote:
Fri Jun 01, 2018 2:17 pm
Due to some personal reason I am planning to move to Ireland for about 2 years with the same employer (they have an office in Ireland) and will be moving back to US after that.
We have a wiki page that looks at the US tax issues associated with holding US investments as a US 'non-resident alien' and vice-versa, and also a bit about the problems associated with moving between countries. One move is bad enough, but here you contemplate two.

Your first item of business should be to become well acquainted with the US/Ireland tax treaty. This provides a 15% US dividend tax rate on payments to Ireland residents, and you should be able to reclaim that against Irish taxes where these are higher or at least at the same rate. Find out if Ireland has any punitive tax rules for 'offshore' fund holdings. Something akin to the US's appalling PFIC rules, for example. And look closely into what might happen with RSUs -- these can pose real difficulties if you hold them across international moves. The standard US tax rate on interest paid to non-resident aliens is 0%, so fewer issues there.

You may also have to watch out for the danger of US estate taxes, should it come to that. For non-resident aliens, US estate taxes start at just $60k of US holdings. Ireland does have a US estate tax treaty, and normally that would protect you up to $11mm or so. But... this treaty is very old, and there is a huge question-mark over whether or not it provides that estate tax exemption uplift. So something else to worry about if you hold over $60k, including in any 401k or IRA accounts. Also, to use an estate tax treaty you have to be domiciled in the treaty country, and if you only plan to be in Ireland for two years that might not qualify you as domiciled in Ireland (this is a tricky area).

Finally, how sure are you that you will be able to return to the US as you intend? Unless you hold a green card, you would again have to apply through the H1B or L1 work visa processes, and both are uncertain when it comes to success. You would also be entirely dependent on your employer to be willing to handle this for you, and a lot can change at any company or employer in two years. You may want to at least prepare mentally to accept that this might turn into a one-way move, or that you could end up moving to a third country after two years, rather than back to the US.
Last edited by TedSwippet on Sat Jun 02, 2018 7:46 am, edited 2 times in total.

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Watty
Posts: 13788
Joined: Wed Oct 10, 2007 3:55 pm

Re: Financial Strategy for temporarily moving out of USA

Post by Watty » Sat Jun 02, 2018 6:16 am

zester wrote:
Fri Jun 01, 2018 2:17 pm
I also have some friends and family members who reside in USA so incase I need a valid mailing address, I have that too.
That state would expect you to file state income tax returns and apparently some of them can be aggressive about trying to collect income taxes from people that are temporarily living outside the country.

Valuethinker
Posts: 35637
Joined: Fri May 11, 2007 11:07 am

Re: Financial Strategy for temporarily moving out of USA

Post by Valuethinker » Sat Jun 02, 2018 7:07 am

zester wrote:
Fri Jun 01, 2018 2:17 pm
Hi All,
This is my first post in the forum, so please excuse any mistakes that I make.
Currently, I am residing in USA and I am not a US Citizen but working with a US based company on work visa. I have investments in Betterment (2 taxable accounts), Robinhood (some stocks) and Fidelity (current employers RSUs in brokerage account and 401(k)). Due to some personal reason I am planning to move to Ireland for about 2 years with the same employer (they have an office in Ireland) and will be moving back to US after that. I also have some friends and family members who reside in USA so incase I need a valid mailing address, I have that too. I checked with betterment and robinhood but they don't allow accounts to be active if the person is not residing in the USA, but since Fidelity account is via my employer, they will allow me to keep the account active. Personally, I would like to keep my investments in US without selling them. Do people here have experience with such situations and what do you guys recommend I do?

Thanks
Mo
With just 2 years I would tend to hold my money in Ireland in taxable accounts. Because of the issues w US taxation when you return to USA.

(however as a non US citizen this might matter less; you won't presumably owe the USA tax whilst you are resident in Ireland)

If there's a pension plan in Ireland I would contribute enough to get the employer match (if there is one). If it's a Final or Career Average Salary scheme (which I very much doubt) then even better-- usually you can accrue those benefits and collect them when you retire (even if you are in USA or somewhere else then). And the Irish state pension, however little you will qualify for, will also be worth having. These things tend to be inflation indexed, and that's very hard to duplicate in private pensions (you can do it, but inflation linked securities are at very low yields, so you need a *lot* of money).

retired recently
Posts: 300
Joined: Sun Oct 04, 2009 6:09 pm

Re: Financial Strategy for temporarily moving out of USA

Post by retired recently » Sat Jun 02, 2018 8:14 am

I am a US citizen that lived overseas for 14 years, using my dad's address the full time I was away for all of my mail. I lived in NC, so did Dad, up until I moved away. During my time abroad, NC did try to assess taxes on me however I was able to demonstrate that my intention was not to return to NC therefore did not owe tax to NC.

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