Tax Considerations for Venezuelan Americans Mulling U.S. Exit

Private Wealth Services attorney Eduardo Arista was quoted in a Thomson Reuters article on the cross-border tax and planning considerations facing high-net-worth Venezuelan Americans as political developments in Venezuela spur renewed interest in returning, investing or restructuring assets. Mr. Arista noted that lowered valuations for Venezuelan real estate and business interests may create a window to transfer wealth, establish planning structures and potentially freeze value. He also advised that any decision by U.S. lawful permanent residents, or green card holders, to relinquish residency involves more than tax compliance, triggering elements of the U.S. expatriation regime such as an immediate exit tax on unrealized gains and a future transfer tax on gifts or bequests to U.S. persons. He further explained that tax treaties are not a guaranteed shield, as invoking a treaty's tie-breaker provision can itself be treated as an act of expatriation. In the end, he emphasized, it's best practice to seek advice from lawyers in both countries to complete the process successfully and avoid surprises later.

"You always have to look at both sides of the coin," he suggested. "[This involves] counsel on both sides to be working together to plan the transfer and help the client implement the transfer in a way that is going to avoid unnecessary taxation in both jurisdictions, or at least try to find what is the happy medium."

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