In my work as an offshore finance consultant, most of my readers are already involved in offshore or international banking. Many of them have recently moved to gold, as a hedge against the devaluation of fiat currencies such as the dollar. So, a frequently asked question is “Do I have to report gold stored offshore to the IRS on the FBAR (Foreign Bank Account Reporting) form?”
This question is also relevant to non-US residents, of course, as there are similar reporting requirements in other countries, although you should be sure to check local reporting requirements very carefully in the country where you normally file. because reporting requirements differ. significantly.
The so-called IRS FBAR requirements refer to the requirements of a foreign bank and financial account reporting form. The actual IRS document you will be working with is called a TD Form F 90-22.1. Under current U.S. tax law, any U.S. taxpayer is required to file this form if they have a financial interest in or signature authority in a foreign financial account that has an aggregate value of more than $10,000 in any time during the course of a year. This not only includes US citizens, but also all foreign residents, domestic partnerships, domestic corporations, or domestic property.
The question has been asked and answered many times before, but was recently addressed again in the press by commentator and asset protection expert Mark Nestmann. In a syndicated article titled “Are Precious Metals Stored Abroad Reportable Financial Accounts?” Nestmann says that tax authorities “construe the term ‘financial account’ very broadly. The definition certainly includes bank, securities, and other accounts that hold financial instruments. However, it does not include individual bonds or share certificates.”
The important question for us, therefore, is whether the physical gold bullion you have in an offshore vault (or anywhere else overseas for that matter) is reportable. The IRS doesn’t provide clear guidelines on this, and you probably don’t want to call your local IRS office and ask them directly. It is best to consult with a suitably qualified tax attorney who is working on your side of the fence.
Nestmann’s conclusion is that “if you keep the metals in a safe deposit box or private vault, without opening a bank or other financial account, you do not appear to have any obligation to report.” At many offshore banks, you must open an account to rent a safe deposit box, but if you don’t want the hassle of filling out the FBAR form, you can always keep this account balance below the $10,000 FBAR reporting requirement. There are also a number of non-bank security deposit facilities available in Austria, Switzerland and the Caribbean. You can find information about these on the Internet.
If you’re not a Q Wealth member and don’t want to register, you can now also buy Peter Macfarlane’s Gold Report as an e-book from the Expat Wealth bookstore.
