No Tax Residence, banks and brokerages

[nwdiver]

Originally Posted by odysea

the goal is to become a sohttps://en.wikipedia.org/wiki/The_Sovereign_Individual not a puppet of a the current comunist regime

The sovereign route has been a bust for those that have tried it, it just doesn’t work anywhere…..

[odysea]

Originally Posted by nwdiver

The sovereign route has been a bust for those that have tried it, it just doesn’t work anywhere…..

obviously they did not execute properly

[Uncle Bob]

Originally Posted by odysea

obviously they did not execute properly

Most interesting, no doubt you will expand on your summation and detail just how it is done??

[odysea]

Originally Posted by Uncle Bob

Most interesting, no doubt you will expand on your summation and detail just how it is done??

exactly explainto not how it sshould be done to avoid your failures

[nwdiver]

Originally Posted by odysea

obviously they did not execute properly

Several believers are serving time for tax fraud, obviously poor execution.

[Uncle Bob]

Originally Posted by odysea

exactly explainto not how it sshould be done to avoid your failures

Ahh, I see, you have no idea either.

[AKA-None]

Originally Posted by Uncle Bob

Ahh, I see, you have no idea either.

A new account that has only posted in this thread and no info where they are.

Hmmm not sure what they think they know

[goboatingnow]

You cannot be stateless , that’s an endless hassle. You can legitimately have no tax residency

Passport largely solely depend on citizenship. You don’t have to live in a country to gain its passport

[Cloroxbottle]

Originally Posted by Freeeeedom

I'm thinking about flagging my boat in Cayman Islands, registering a consulting company there and having no tax residency anywhere in the world.

Practically speaking, if you're an American citizen, your tax residence is always the United States. Now if you are domiciled outside the United States, there are certain things like the foreign earned income tax credit you are entitled to claim...but otherwise this gives you no benefit.

There was a time in the past when I had not tax residency and I found out that it makes brokers and banks completely freak out. Does anyone have recommendation where I could park my cash and investment without the risk of having my assets frozen or accounts closed?

Its actually gotten much worse than that now, with the Patriot Act and third party verification services identifying PMBs, banks and brokerages will not open/close/freeze accounts that don't have something a third party database identifies as a physical address which causes an endless amount of grief for full time RVers, Sailors, and Nomads.

HSBC england offers a nomad bank account, but their customer service has a reputation of being poor and I don't know if they work with US citizen clients or not.

The full time cruising life starts next year for me and it isn't yet clear to me how to get around this problem.

[Cloroxbottle]

Originally Posted by 5BTM

To clarify, tax avoidance is not a crime, tax evasion is.

My wife and I are retired with practically identical gross incomes.

Her effective tax rate is three times mine, the difference being mine is a combination of rental income which is offset by depreciation, and dividends, of which the first $45K is tax free, even in Canada (Quebec).

My tax motto is: "Maximum benefit with minimum input"

Quite right. Tax evasion is the crime of not paying what you legally owe to the revenue service.

Tax avoidance - what I like to call Tax efficiency - is simply living your life and managing your affairs in a way that you 100% legally reduce the amount you owe. The irony is that it is the progressive tax codes with their Byzantine rules and rates that have created this. If everyone lived under a strict regime of a 10% flat tax with no deductions or exceptions, this entire thing would go away.

[skenn_ie]

I understand that you can relinquish your US citizenship and avoid liability to the US treasury. I also understand that Portugese citizens are only liable for taxes on money earned while IN Portugal.

[Statistical]

Originally Posted by skenn_ie

I understand that you can relinquish your US citizenship and avoid liability to the US treasury. I also understand that Portugese citizens are only liable for taxes on money earned while IN Portugal.

Correct although it isn't something to be taken lightly. If you have >$2M net worth you are a Covered Expatriate and subject to an "exit tax". Note even if married each person is treated differently so the first step would be to split all assets (no joint assets) if needed to ensure both spouses are individually under $2M. This number was never adjusted for inflation so in real wealth terms this restriction just gets tighter and tighter each year.

You file to renounce, pay a fee, and are given a date to formally renounce at a consulate OUTSIDE the US. You can't do it in the US as you would instantly be an illegal immigrant.

Technically the US doesn't require you to have a passport with another country prior to renouncing and while they will strongly discourage you from doing so without dual citizenship they can't legally stop you. However if you renounced without another passport you would instantly become stateless which is a completely legal nightmare and could result in you being arrested or detained in the country you are now potentially located illegally. Even if that doesn't happen you likely wouldn't be able to travel to any other country. In essence you would fall through the cracks in the legal system which largely just assumes everyone has a passport/nationality. Depending on the country you likely would need to seek refugee status, then residency, and then work for citizenship and very likely be unable to travel anywhere for the many years that process takes. So defacto unless you want to turn your life into an absolute nightmare step 0 would be get citizenship somewhere else.

It is only the US that is this draconian. Most countries tax citizens if they are residing in country if they aren't then assume they will be taxed wherever they are residing. Since there are countries with no taxes on investment income that means you can reside in one of those countries and effectively be taxed nowhere without changing/losing citizenship. For Americans though this is not an option under any circumstances. Americans have tax liability for global income regardless of where they reside and that liability exists from birth to death and potentially after death (estate). There are offsets and credits but there is no blanket immunity. The only step short of renouncing citizenship would be residing in Puerto Rico however that is particularly challenging for cruisers as the laws granting federal tax exemption require you to reside not just most of the time in Peurto Rico (as in not more in any other location) but specifically 180 days a year. So if your resided physically within PR for 179 days due to cruising the rest and being out a bit too long your federal tax exemption instantly vaporizes and all your income for that year becomes again subject to federal taxes.