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| Flags of Convenience |
The Perpetual Traveler
Michael Verdon
05/02/2005
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In the late 1990s, Anthony secured Grenadian citizenship for himself and his wife through a government passport purchase program (which has since been phased out) and took up residence in the Bahamas, where there is no estate tax. After moving his residence and domicile there, the couple relinquished their U.S. citizenship. Next, reluctant to stake his future on the relative insecurity of a country such as Grenada, he secured a permanent residence visa to Canada and moved there. He also set up a trust that, under a special exemption in Canadian law, allowed income and assets to remain tax-free for five years. The couple’s Grenadian passport with a Canadian permanent residence visa meant they could travel to the United States without a visa, and stay up to 122 days a year. After three years, Anthony and his wife acquired Canadian passports, gave up residence in Canada and moved back to the Bahamas.
This tactic provided the couple with the security and freedom of a Canadian passport, while their Bahamian residency precluded them from paying income and estate taxes after the five-year grace period ended. Anthony and his wife now spend up to six months each year in Canada, 122 days in the United States (any longer and they would be considered legal aliens who fall under U.S. tax law again) and the rest of their time in the Bahamas.
Still other expats have a philosophical ax to grind with U.S. policies. “I’m giving myself a birthday present next June and moving out of the U.S. for the rest of my life,” explains Michael, an heir to a long-established business fortune. “I am taking up residency in Ireland, a country that doesn’t invade other lands, and has no phony wars on drugs or terrorists.”
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