Beneficiary is US Citizen but Foreign Resident
Because of regulations, the brokerage firm we work with does not allow accounts for foreign residents.
Would a properly written trust with a US trustee work?
Because of regulations, the brokerage firm we work with does not allow accounts for foreign residents.
Would a properly written trust with a US trustee work?
Permalink Submitted by mk foss on Fri, 2015-01-02 22:53
When foreign residents are retirement plan beneficiaries, U.S. income tax withholding is a requirement. Apparently the brokerage firm that you work with does not want to deal with the withholding of U.S. income taxes. There are custodians that will do the U.S. withholding so you could transfer the retirement account to such a custodian. If a U.S. trust is the beneficiary of a retirement plan, the custodian will not have to withhold U.S. tax on distributions BUT the trustee will be responsible. If the beneficiary renounces US citizenship, withholding on trust distributions will be required.