Foreign Life Insurance Policies & US Tax | FBAR and PFIC International Tax Lawyer
Hello and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I’m an International tax attorney and owner of Sherayzen Law Office, Ltd.
Today, I’m continuing my series of blogs from Santa Monica, California and these blogs are centered around one issue: US citizens moving to live overseas. In the previous blog, I discussed the issues concerning foreign pensions.
Today, I’d like to talk to you about a different issue: foreign life insurance policies. Many people are not aware of this fact but foreign life insurance policies are reportable assets for US tax purposes. Moreover, they may have real income tax consequences for US tax compliance, especially investment life insurance policies; those are the most dangerous – the so called unit-linked (ULIP) insurance policies because they are likely to be invested in PFICs. In the previous blog, I’ve already discussed what a PFIC is and why it is so dangerous.
Foreign financial advisors really love their clients investing in these types of assets. The reason being is that they are usually tax-exempt in local countries, so when foreign advisors advise about something like this, they do not take into consideration the fact that they are dealing with a US citizen and for this reason, they may end up getting their US clients in danger.
If you have foreign life insurance policies and you would like to know more about your US tax compliance required for these policies, contact me at (952) 500-8159 or you can email me at [email protected]
Thank you for watching, until the next time.
