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Subject:  Re: Planning to Retire Oversees Date:  2/18/2000  5:37 AM
Author:  baanista Number:  4244 of 882363

Anya said: We are seriously interested in setting up our new home base in rural France . . .

The standard advice to people planning a move to a new town, state, country, whatever, is RENT FIRST. Lots and lots of transaction costs and other gotchas to buying a place, especially in a new jurisdiction. Test drive your "Peter Mayle" (A Year in Provence) fantasy before taking the plunge.

As far as investments, theoretically, you could start slipping cash out of the country now and invest it through a low/no tax jurisdiction. There are several problems though.

1. If you hide what you are doing from the IRS, you are breaking the law. If you don't hide what you are doing, there will be no tax savings.

2. Investment choices may not be as good and fees are likely to be higher. This is especially true if you are trying to "hide" assets from the IRS, which may result in your working with financial intermediaries who feel that they deserve a "share" of your tax savings. The worst case is you wind up investing through someone with the ethics of Dogbert.

3. You may find your new domicile is less tax friendly that the US. The EU area is not particularly tax friendly, and the future will likely bring "tax harmonization" proposals as the big taxers work diligently to keep their own citizens from avoiding/evading taxes.

4. Tax deferral schemes (IRA's, 401K's, etc.) may not translate well if you become resident in another country. So some extra homework on what is taxable when and where would be advisable.

Au Revoir
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