We Talk Trusts - S1E1: Navigating the Complexities of Foreign Grantor Trusts скачать в хорошем качестве

We Talk Trusts - S1E1: Navigating the Complexities of Foreign Grantor Trusts

Join us for a deep dive into the world of Foreign Grantor Trusts (FGTs) and their impact on U.S. Federal income tax, featuring guest speaker Jay Rubinstein, a seasoned U.S. Tax Lawyer from the society Withers. In this episode, we explore the conditions that classify a trust as foreign, and how this classification affects the tax obligations of the Grantor and U.S. beneficiaries, particularly concerning distributions and estate taxes. We'll discuss the essential clauses typical in FGTs, the significant tax consequences post-Grantor's death, and strategies to manage adverse tax effects, including the implications of the CFC rules following the 2017 tax reform. We'll also cover the long-term implications for estate, gift, and generation-skipping taxes. This comprehensive overview aims to provide listeners with a clear understanding of FGTs in U.S. taxation. 00:08 - Introduction by John Ryan 01:09 - Can you tell us a bit about yourself and your professional background? 01:36 - Could you please explain what is a foreign grantor trust? 02:50 - What are the two types of foreign grantor trusts and how do they differ? 03:37 - Who might use a foreign grantor trust? 04:16 - It is said that the revocable type of foreign grantor trust is a very flexible instrument. Could you explain why this is so? 05:44 - Can you please explain how foreign grantor trusts are treated for tax purposes in the US? 06:30 - What is the typical language that you will find in properly drafted foreign grantor trust deeds? 08:10 - Could you explain what happens to a foreign grantor trust on the death of the foreign grantor? 09:22 - Could you explain the concepts of undistributed net income (UNI) and distributable net income (DNI)? 12:48 - Can you explain how you handle the accumulation of prior years' income in the most tax-efficient way? 14:52 - If you adopt the strategy of distributing current year income every year, how much time do you have following the end of the year to distribute this income? 15:56 - Could you explain why it is common practice for the trust to hold its portfolio investments through underlying companies? 19:12 - How about a two-company solution where you hold the US shares in one company and the foreign shares in another company? What does this do to the planning? 19:59 - Can you please explain the check-the-box rules? 20:51 - Can you please explain the difference between controlled foreign corporations (CFCs) and personal holding companies (PFICs)?