US tax havens – the new Switzerland?

Family trusts


US tax havens – the new Switzerland?


By Kara Scannell and Vanessa Houlder

After pursuing Swiss banks for helping Americans hide money, the United States has become a magnet for offshore wealth. Family trusts are booming in South Dakota, a remote state with guaranteed secrecy and no tax.

In an old discount store hugging a corner in downtown Sioux Falls, South Dakota, the heirs to the William Wrigley chewing gum fortune have an office for their family trust. So do the Carlson family, owners of the Radisson hotel chain, and the family of John Nash, the late hedge fund giant.

They are among the 40 trust companies sharing an address at 201 South Phillips Avenue, a modest, two-storey white-brick building. Inside, $80 billion (CHF77.5 billion) worth of trust assets are administered.

South Dakota is best known for its vast stretches of flat land and the Mount Rushmore monument, where the heads of four presidents are carved into the Black Hill Mountains. Its population of 858,469 ranks 46th in the country. Locals joke that it has more pheasants – about 1.5 million – than people.

Yet despite its small town feel, Sioux Falls has become a magnet for the ultra-wealthy who set up trusts to protect their fortunes from taxes and future ex-spouses. Assets held in South Dakotan trusts have grown from $32.8 billion in 2006 to more than $226 billion in 2014, according to the state’s division of banking. The number of trust companies has jumped from 20 in 2006 to 86 this year.

The state’s role as a prairie tax haven has gained unwanted attention since the release of the Panama Papers, an investigation by the International Consortium of Investigative Journalists.

The leak of more than 11 million documents from a Panamanian law firm – some of which will be put on to a public database today – has drawn attention to the anonymity that is available in the US.

After years of threatening Swiss and other foreign banks that helped Americans hide their money, the US stands accused of providing similar services for the rest of the world. “America is the new Switzerland,” says David Wilson, partner of Schellenberg Wittmer, a Swiss law firm. “In the industry we have known this for several years.”

The US has a long history of attracting funds from undisclosed foreign sources. In 2011, The Florida Bankers Association told Congress there were hundreds of billions of foreign deposits in US banks because “for more than 90 years the US government has encouraged foreigners to put their money in US banks by exempting these deposits from taxes and reporting”.

READ MORE HERE:   http://www.swissinfo.ch/eng/family-trusts_us-tax-havens—the-new-switzerland-/42141408

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