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Important Points

Important Points

Residence Planning Points to Ponder

Residence planning requires a lot of research, the two basic principles that you must keep in mind amidst your residence situation optimization are making the correct choice for your residence location and identifying the nature of your business assets.
When private clients opt for international planning, we suggest they pay special attention to the legal aspects of their new residence location.
The change of residence can sometimes prove to be a highly logical proposition for families and individuals. The reason why such applicants find residence planning a smart option is because they either want their future to be insured or completely free from an unstable economic or political climate in the long run. Not only do alternative residence planning help families experience a better security option but also opens doors for a better quality of life.

Domicile and residence

The meaning ofDomicile is to live in a place and make a permanent home there. This concept was derived mainly to control jurisdiction in terms of inheritance taxation. Legal Domicile and residency are two different concepts that are often misunderstood by each other. In some countries like the UK, when a client moves to another country and becomes a resident, the previous country still considers them domiciled for gift tax purposes and inheritance taxation. The Domicile policy is followed in many other countries where inheritance tax is still imposed on individuals who are no longer residents of the country.

Income tax based on residence

While some countries impose personal income tax on individuals merely based on their residency, other countries conduct tests to determine an individual’s tax situation. For instance, the person’s interests, physical presence, and available accommodation are usually examined by the state. Similarly, when a person owns the bonafide residence which is acquired when one finds residency in another state, the former state is in no position to impose taxes on the individual that is now known as an emigrant.
Similarly, taxation can also stem from acquiring citizenship rather than residency. USA citizens are legally bound to pay their taxes to the USA federal government because they possess the state’s citizenship.Whether they are the residents of the state or not, they have to pay taxes unless they decide to terminate their citizenship, only then their tax liability will be discontinued.

Inheritance and estate planning

Inheritance taxes and Inheritance laws are affected majorly by residence planning situations. However, this impact can clearly be prevented if the applicants add professionals and inheritance tax experts to their residence planning team. Acquisition of clear knowledge in terms of inheritance tax legislation and all the legal aspects tethered to inheritance tax jurisdiction is extremely important. For instance, if a tax resident passes away in one state, there is a chance that another country will chime in to claim that that individual was in the possession of their state’s legal domicile and eventually take over their entire estate to fit their personal narrative of inheritance taxation

Emigration and exit taxes

Many countries have reportedly gone against emigrants by imposing different taxation policies. The impact of such measures may have a significant impact on the relocation plans of individuals and their tax aspects.

Health insurance

Health insurance is a key element that must not be overlooked during residence planning in another state. The reason why health insurance holds undeniable significance is because when a client moves to another country, they most likely struggle to find an insurer that meets their requirements. Discussing your health insurance plan with your adviser beforehand will save you a lot of time and effort in the future. We recommend our clients always opt for worldwide health insurance so the change of residence does not inflict any damage to the healthcare plan. At International Passport, we connect you to the best insurance network to guarantee full coverage of your healthcare.

Business and family situation

To achieve a successful residence plan, your business and family must align with your international residence planning. It is wrong to advise your client to change residence for tax reasons because sooner or later the client will fall out with the original plan and put their tax situation at risk. However, when the business and family of the client fit in well with the change of residence, estate planning and legitimate tax easily become available for the client to solidify their residence in the country.