The IRA Rescue Plan®

The IRA Rescue Plan®

Do you have money in an IRA or a 401(K) that is causing more tax problems than solutions? Are you worried that your investments are vulnerable to unreasonable market gyrations? Are you disappointed, perhaps disgusted, by the performance of your investments? Are you concerned that these investments are not safe from government encroachment and/or seizure?

Would you like to be able to invest your IRA or 401(K) investments as you see fit, and not according to arcane government rules and/or your bank and broker?

Would you like to easily and simply invest in land; anywhere?  Gold?  FOREX?  Options?  Offshore business opportunities? etc.?

The IRA Rescue Plan® may be the perfect thing for you.

STEP 1:    Liquidate your current IRA account, and roll-over the funds to a new Custodian (in the USA) that will agree to hold non-registered shares (not all banks and brokers will hold non-registered shares even though they are legally allowed to do so).

STEP 2:    Establish a specially structured IRA Investment Company that will be legally owned by your IRA Fund.  You will be the President/Manager/Director of the Company, and your IRA will be the shareholder. Since the company will be a “pass through” tax entity, and your IRA is a tax exempt entity, there will generally be no taxes on the income of the company.

STEP 3:    You instruct your new Custodian to buy shares in the newly formed IRA Investment Company as described above.

STEP 4:    You invest the funds of the newly formed IRA Investment Company as you see fit (subject to basic rules of business). Invest in foreign companies, gold and precious metals, international real estate, etc.

The entire structure is legal and designed to comply with a number of important Tax Court Rulings and Appeals Court decisions.  Best of all you remain in total control of the money (in fact you will have more control over the funds than you did before!).  By arranging for your IRA account to buy the shares in the new company under your control, the money in the IRA will then be free to invest as you see fit. You will even be able to give yourself “reasonable” compensation for services.

The package includes the formation of your IRA investment company, arranging the roll-over of funds to a new Custodian, and an Attorney Opinion Letter approving of the structure and transfer.

Freedom and Opportunity, combined with Safety and Security.  A very rare combination.

CAUTION!

There are a number of programs available that allow you to withdraw funds from your IRA, but not all are the same. In order for a system to work it must comply with Swanson v. Commissioner. The case is very detailed, and provides a blueprint of how to comply. However Swanson does not describe every possible contingency that may be acceptable, although it does reject a few alternatives.

In the past we cautioned against using any system that deviated from the “safe harbor” defined in Swanson. The entire area was so new and untried that we believed it was just too risky to experiment. However, as time has passed it appears that some of the more novel approaches are in fact working just fine.

One system that we have now adopted involves the simple use of one LLC treated as a “pass through” tax entity. Since the IRA is exempt from taxes, there will be ZERO tax on the entity as long as all the company does is passive investments.

We feel confident that this system is safe and effective, but as always, when dealing with the IRS, there is always a chance that the IRS and/or the courts will change their interpretations of the law.

Are you interested in finding whether or not the IRA Rescue Plan® might help you?

DOWNLOAD FREE REPORT: [IRA_Rescue_Plan]

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How a US LLC can Uniquely Benefit a UK Resident

A prospective client approached me recently regarding the benefits of establishing a US Limited Liability Company (US LLC), becoming a non-resident of the UK, and in which order should he proceed. Due to the unique status of how the UK interprets US LLC status, residents of the UK can receive some very unique benefits if they neither incur US or UK “effectively connected income”. This was my answer:

Well I first must fully agree with you about non-res status. It can be a real deal changer. However, in your case it is not absolutely necessary, and I would feel free to proceed with a company formation prior to actually leaving the UK.

If you own a US LLC it will be treated very oddly because of the way that the US and the UK deal with how US LLCs are treated for tax purposes.

In the USA the default setting of the US LLC is “disregarded entity” which means it does not exist for US tax purposes. So if you do not live in the USA and you do not earn “effectively connect US source income” then you will owe no US taxes. In fact you will not even have to file tax returns. This will be the case even if you have a US bank account and do all your banking in the USA. Just receiving money in the USA, even if that money comes from US sources, does not create a tax liability. For that you need to do more; make things, store things, deliver things, maintain permanent offices and staff, etc. from inside the USA.

Now that all sounds pretty good! However, it only gets better for citizens of the UK. Even though the US considers the US LLC to be a “disregarded entity” the UK treats the US LLC as a separate entity. If the US LLC does no business in the UK and incurs no income in the UK then there will be no UK taxes due from the income earned by the US LLC. Now you will need to pay taxes on income you receive as a salary or profit distribution, but you will be able to provide yourself with many tax free benefits since the US LLC will have no taxes to pay anywhere. Money you do not distribute to yourself, or use for your personal benefit will be deferred taxation allowing you to further invest that money. Now it is wise to be careful about how you give yourself these “tax free benefits” since the UK may decide that what you are really doing is giving yourself income and then fraudulently evading taxes; not good. So don’t be greedy. If you are receiving real economic benefits while living in the UK then pay taxes on that income. Keep in mind that you get to choose how you get paid and can select the method with the least tax; profit distributions, salary, reimbursement for contract work, etc. You get to choose whatever is best for you, but again don’t be greedy.

This takes us to the interesting issue of how to really avoid UK taxes. Move out of the UK. I am not a UK attorney, and I do not even pretend to play one on TV, but it is my understanding that in order to gain full non-resident status you must do more than just leave the UK and stay out a certain number of days. You must also obtain a legal residency in some other country. In this regard there are a lot of interesting options out there.

I chose the Republic of Georgia for a number of reasons. For me it was mostly lifestyle issues and economic opportunities, but there are also a lot of tax benefits to be had here. Getting a residency is simple and easy, and it can lead to citizenship for some in under a year! I don’t know of any place else on earth where that is possible without some sort of ancestral claim or a huge investment in the country; at least not a country that I would actually want to be part of.

Some other interesting options that provide great tax benefits: Montenegro, Mexico, Malta, Latvia, etc. Each has its advantages and its disadvantages. Note, you do not necessarily have to live in the country that you have a residency. It might just be a legal formality so that you can claim non-res status. On the other hand it might be nice to combine the issue of tax status and where you like to live.

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