The client is a successful Taiwanese entrepreneur and married with three adult children who plan to emigrate to the U.S. in the near future. She is semi-retired, with the majority of their family wealth comprised of their family business’ publicly-listed shares.
She wishes to transfer ownership of her own shareholdings to a U.S.-based trust that was set up for her children, but would incur a gift tax upon doing so.
We established a PPLI policy to protect our client’s children and to facilitate the transfer of their family’s assets. By using their family assets as premium payment for the life assurance policy, the transfer is considered a transaction and not a gift; therefore the client is able to avoid incurring the aforementioned gift tax.
Not only is the asset portfolio held within the PPLI policy subject to no ongoing taxation* , but the benefit proceeds eventually paid out to the trust will also be free of inheritance tax.
Our solution allows our client to preserve and protect her wealth, without worrying about cross-border complications. She has protected her family and ensured her children will receive their inheritance according to her own wishes.
* Assuming no unreclaimable Withholding Tax.