Warburg’s 100-year-old investment banking firm, Dillon Read (on Park Ave. NY) (now UBS Warburg) has offices in 39 foreign countries, including the Bahamas, the Small Cayman Islands, Hong Kong and the Channel Islands. Makes you wonder why, doesn’t it?
Nonresident alien corporations, trusts, banks, and individuals can trade US stocks, bonds, commodity contracts, and options 100% tax-free on US capital gains.
Under the US Tax Code, only when a foreign corporation, foreign trust, or nonresident alien individual establishes permanent residence in the United States is it subject to US capital gains taxes. in the same way as domestic taxpayers. For a corporation, permanent residence would be an office or warehouse in the United States. Capital gains realized by foreign corporations and other nonresidents “not engaged in a trade or business within the United States” are exempt from tax under IRC Section 871 and IRC Section 881 and Section 897(c) (3) IRC. Additionally, section 864-2(C)(1) and (2) of the US Treasury Regulations provides an exception for what it means to be “engaged in a trade or business within the United States.” Under US regulations, a non-resident’s securities transactions conducted through a US broker-dealer, independent agent, or employee are not considered to cause the non-resident to be “engaging in a trade or business within the United States.
Publicly traded stock market gains (from stocks and bonds listed on the NYSE, NASDAQ, or AMEX) that accrue to an offshore company are free of U.S. capital gains tax if the offshore company is an offshore company. “Controlled Foreign Company (CFC)” (ie, “more than 50% of the voting and non-voting shares are owned by US SHAREHOLDERS”). See sections 951 to 958 of the IRC. See especially Section 951(b) of the Code for the definition of US STOCKHOLDERS.
US taxpayers who use tax havens are taking on more risk (generally) than a non-resident alien (non-US citizen). Whether a US citizen taxpayer will have a tax liability on the profits of the offshore company depends on many things, including the type of income the company produces (ie Subpart F or not Subpart F) and how many shares are in the company. owned and whether the offshore company is a CFC, as defined in the Internal Revenue Code Sections 957 and 958.
More on Anguilla’s tax-free paradise. Click the link below for details
[http://www.geocities.com/taxhavens123/caribbeantaxhavens.html]
Tribute in Honor of: Confidential Banking Ordinances in the Caribbean
[http://www.geocities.com/taxhavens123/bank_confidentiality.html]
Wealthy Dupont Nemours and Roosevelt families buy a tax haven
Want to know why and how the wealthy former Dupont Nemours and Roosevelt families were able to purchase 4,000 acres of waterfront property on the island of Provinciales in the duty-free crown colony (or “Overseas Territory”) of the Turks Islands? and Caicos for 1 hundred year acre?
This 4,000-acre sale (now a marina and resort town, with an airport for jumbo jets ($50,000,000 airport was donated by the UK government) closed in the 1970s, not the 1970s? from 1870?!?
Source: A full page advertisement from the Government of Turks & Caicos 3 in Investor’s Daily (1985).
Was this the most profitable real estate investment of the 20th century? A quarter-acre lot in the gated community of Sandyport here in Nassau, Bahamas is selling today for approximately $260,000. Half-acre canal lots on Lyford Cay are selling for around a million dollars.
Do the math. With an initial investment of just $40, the 4,000-acre property could be worth nearly $4 BILLION today.
YOU BE THE JUDGE…. Is the use of the world’s tax havens a blessing or a detriment? Before you answer, check out some of the IRS loopholes in our “Tax Code” – uncovered for viewing below and hidden within the tax law for taxpayers! There is a very important loophole for the non-resident alien that you must not overlook!
