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The Complicated Subject of Money

Meme from the Adrian Leeds Group for investing in France, showing the coastline in Nice

Money can be such a complicated subject. When I think about how much time, energy and money I spend dealing with the subject of money, it shocks even me. I’m not talking about the making of money—that’s just one aspect of it, and that could be the simplest part. What I’m talking about is how to count it, keep track of it, invest it, spend it, report it to the tax authorities, etc. that we all must deal with, like it or not.

Meme for the FACTA logo in red white and blueAmerican expatriates have a double whammy because we are forever indebted to the U.S. whether we live there or not, all because of its citizenship-based taxation (CBT) vs residence-based taxation (RBT) like we have in France and like in every other country in the world, with the exception of Eritrea (a country in the Horn of Africa). American expatriates have been battling unfair taxation for years and even more so since the advent of the Obama-era law known as the Foreign Account Tax Compliance Act (FATCA) came into force.

This law requires U.S. taxpayers, regardless of where they live, who own financial assets outside of the United States to report those assets to the IRS. There’s no tax to pay on it, but the IRS wants to ensure that they haven’t lost any of their own revenues to unreported offshore holdings.

Okay, fine. I get that, but it also requires foreign financial institutions (banks, insurance companies, mutual funds and brokers/dealers) to report certain information about accounts held by U.S. citizens, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

Cartoon on the effects FACTA has had on banks - by Cagle.com

Cartoon by Cagle.com

That’s where it gets to be a big problem for those of us living outside of the U.S. Those financial institutions don’t have the time, energy or money to comply with regulations imposed on them by another country, even as powerful and important as is the U.S. We’re the pariahs in the financial world and we, the lowly expatriates, must suffer the consequences of a limited number of resources at our disposal. For our clients, that translates to difficulties opening a bank account or getting a mortgage. It’s maddening!

Meanwhile, we still have to report every penny we touch to the IRS, even if we haven’t lived in the U.S. or earned any money there or have any tax to pay. The hardest hit group are the “Accidental Americans”—anyone born on U.S. territory, including those who leave as infants or young children, even if neither parent is a U.S. citizen. (U.K.’s Prime Minister Boris Johnson is one of them, born in New York!)

Illustration attributed to Americanexpatfinance.com

Illustration attributed to Americanexpatfinance.com

All this makes money for the U.S. expatriate even more complicated than it already is. This week, I spent an hour on Zoom with three financial advisors on both sides of the Atlantic just to determine how to report rental income. I might be spending more money on the professional advice than the tax savings warrants, but it’s not about the money—it’s about doing it right to avoid getting audited by either the IRS or the French FISC!

I’ve also taken time this week to talk to a French Notaire about reducing inheritance taxes my daughter will incur when I pass away based on my worldwide assets…because I’m tax resident in France and it falls under French law. Inheritance taxes in France are very high. Unfortunately, I didn’t plan well enough when I was younger and less concerned with dying and at a time when my assets were fewer and less valuable. The Notaire offered up several ideas to reduce the inheritance taxes, but in all cases, it will cost me some money to reduce my daughter’s burden.

My financial advisor had another viewpoint—why spend money I need now in my “old age” in order to put more money in the pocket of my daughter who will have the benefit of the remaining balance of the inheritance anyway? Interesting dilemma…is the bird in my hand worth more or less than the two birds in my daughter’s?

Just keeping track of money for tax reporting purposes is a time-consuming and expensive burden…and we have to do that for both the U.S. business and the French business, for my personal tax returns on both sides and the story in between them. The tax treaty between France and the U.S. helps prevent double taxation, but it’s not perfect. Still, our tax reports must comply with one another…what you report to France and what you report to the U.S. must agree. The returns are due at about the same times—in France, your deadline depends on what department you live in and for this year it varied from May 26th to June 8th. The U.S. deadline for expatriates was June 15th, but an extension can be taken till October 15th. It takes a big effort to coordinate the returns so that they agree with one another.

I find all of this fascinating and frustrating all at the same time. Fortunately, we have a bevy of brilliant advisors who can help untangle the financial web.

Let me introduce them to you (and be sure to tell them I sent you!):
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Brian Dunhill – Dunhill Financial
International Financial Planners Specializing in American Expats and Expats in America

Brian Dunhill, Dunhill Financial

Brian Dunhill

Dunhill Financial offers independent advice and personalized solutions for each client based on their individual situation. Dunhill’s advisors have a wide breadth of experience working in multinational firms and will help you feel secure in an environment of trust, discretion, and confidence. Through aggregated planning and collaborating (where appropriate with your accountant and attorney), they will be in a position to help with every aspect of your financial planning. They will select a diverse group of carefully chosen, and vigorously monitored, investment managers to manage your assets rather than promoting packages of our own.

They offer services including:

Financial Planning
Pension Planning including Social Security
Insurance and Estate Planning
Management of funds directed by your existing Financial Advisor, Taking into account PFIC regulations and FATCA

The Adrian Leeds Group recommends Dunhill Financial for all your financial planning needs.

Brian Dunhill is happy to discuss your options during a telephone consultation or face-to-face meeting.

Contact Brian Dunhill
Email: [email protected]
SKYPE: briandunhill23
UK Tel: +44 7514 993556
US Tel: +1 561 570 5640
Website: dunhillfinancial.com
Address: 20 Corssharbour Plaza, London, United Kingdom E149YF
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MD Patrimoine—Matthieu Duclos
French Tax Preparation & Asset Management

Matthieu Duclos

Matthieu Duclos

Matthieu Duclos is a French tax and investment expert, and head of his own firm. His background is in business and tax law, and he has worked with KPMG as a tax advisor as well as with Christie’s as an administrator. He can assist with wealth and tax planning, and management (planning and optimization), tax preparation, and financial investments.

Contact Matthieu for the preparation and filing of your French tax returns.

Contact Matthieu Duclos
Tel: +33 06 08 75 55 49
Website: md-patrimoine.fr/
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Pik Consulting
US & French Tax Preparation & Business Services
Business Advisory and Tax Optimization Services for Expats and Foreign Companies Wishing to Settle Down in France

Benjamin Pik

Benjamin Pik

Benjamin Pik is a dual French and American certified Public Accountant admitted to practice public accounting both in France and in the US. Bilingual in English and French, he holds degrees from both the University Paris Dauphine (France) and from Concordia University (Canada). Prior to opening his own practice, Benjamin worked for 8 years in international accounting firms across North America, Middle East, and Europe where he coordinated French and foreign financial audits and provided advisory services. Benjamin is also involved with the American expat community in France.

Services include:

Private Tax Services

We are a team of French and American CPAs specializing in assisting French residents with U.S. and French individual income tax and other international tax compliance matters. Our aim is to assist individuals and families with:

• U.S. and French tax preparation
• ITIN Application
• Prior years’ tax regularization and Streamline Certification

Business Services

We assist foreign subsidiaries in France and English-speaking entrepreneurs who want to develop their business in France by providing them administrative accounting and tax assistance.

• Administrative services
• Accounting services
• Tax services
• Payroll and Human resources services
• Legal services
• Auditing

Contact Benjamin Pik
Email: [email protected]
Website: pik-consulting.com
Tel: +33 06 27 94 60 17
Address: 7 Rue Theodule Ribot, 75017 Paris, France

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Get Financing with Kim Bingham

Kim Bingham - Financial specialist image by Jessica Venturi

Kim Bingham

Kim Bingham is an international mortgage broker, securing loans for non-resident buyers purchasing property across France. After a successful start as a property search consultant then real estate agent in Paris, in 2017, Kim established the team of international mortgage brokers at Private-Rate.com. Kim works with clients worldwide, finding financing solutions adapted to each client’s needs and French real estate projects.

TO INQUIRE WITH PRIVATE-RATE.COM
Contact: Kim Bingham
Email: [email protected]
Website: private-rate.com/

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Money Transfer Made Easy

The Adrian Leeds Group works with three currency exchange specialists:

• Moneycorp
• Currencies 4 You
• OFX

MONEYCORP

Kelly Cutchin

Kelly Cutchin

Contact: Kelly Cutchin, Country Manager, USA (Florida Office)
Email: [email protected]
Tel: +1 407 352 5890
Tel: +1 800 239 2389
Mobile: +1 863 207 6616

Contact: Tanya Uniacke, Account Manager
Email: [email protected]
Main Office London: +44 20 7828 7000
Website: moneycorp.com

 

 

 

 

 

 


CURRENCIES 4 YOU

Jason Clarke

Jason Clarke

Contact: Jason Clarke
Email: [email protected]
Tel: +44 1322 319 550
Website: currencies4you.com

 

 

 

 

 

 

 

OFX

Logo for OFXContact: Hugo Horton
Email: [email protected]
Tel: +44 207 614 4156
Website: ofx.com
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The proverbial bottom line is this: money is a complicated subject and we need help to make sense of it. Don’t hesitate to work with professionals to help you sort it all out. For more information about any of our recommended financial advisors, visit our website. And if you contact any of the professionals we recommend, don’t forget to tell them I sent you!

A la prochaine…

Photo of a photo of Adrian Leeds in an article for The Best Real Estate Agent in the WorldAdrian Leeds
The Adrian Leeds Group®

P.S. If you are considering a property purchase in France, don’t do it lightly. Let us help you make the smartest decisions to ensure you make the best investment you can. Contact us to learn more!

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