02/01/2014
US billionaires have found a new tax haven
At a time when many tax havens are tending to give up at least some of their privileges under international pressure, US billionaires have found new territory to host their wealth very close to home, in South Dakota, the news agency Bloomberg reports. The otherwise unalluring state has taken advantage of a legal loophole to offer high net worth individuals an investment vehicle which is highly attractive from a taxation standpoint, known as a trust fund. Among the various formats on offer, the “dynasty trust” appears as one of the best, since it allows for Federal estate tax to be avoided. In the past four years, the sums in funds administered by government companies responsible for these trust funds has tripled to USD121bn, largely capital coming in from other states. The only requirement to claim these highly favourable trust fund tax conditions is to have an address in South Dakota. High net worth individuals who are interested are not required to move to the state, much less to have capital in a local bank.
