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Parts Unknown! The Benefits of Malta Pension Schemes for U.S. Taxpayers  

Author:  Gerald R. Nowotny.

Source: Volume 36, Number 02, Winter 2019 , pp.25-39(15)

Journal of Taxation of Investments

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Since the enactment of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017, interest in the use of qualified retirement plans has increased. However, qualified retirement plans are not without their limitations and complications. For the closely held business owner, the controlled group and affiliated service group rules serve to limit the ability of business owners to discriminate in their own favor or to create duplicate pension arrangements to multiply the benefits of pre-tax contributions and tax deferral. The challenge of identifying a tax strategy that provides for tax deferral and tax-favored distributions is a difficult planning proposition. This article discusses the planning utility of the Malta pension scheme as a vehicle that provides tax deferral and tax-favored distributions in a manner that is more powerful than a Roth IRA. The late Anthony Bourdain’s “Parts Unknown” was not really about food but rather about discovering the world through sharing the cuisine of and “breaking bread” with citizens from “less travelled” parts of the globe. The use of Malta Pension Plans is not unlike the show, in that Malta is off the grid for most Americans, and the strategy is equally off the grid of most tax planners. The Malta Pension Plan is an excellent alternative to the Roth IRA. The Roth IRA, for all of its benefits, has many limitations. The Malta Pension Plan can fill these planning gaps in a powerful way. This article is an introduction to the Malta Pension Plan.

Keywords: Malta Pension Plan, tax deferral, foreign trust, real estate investments, tax reporting, Roth IRA, charitable remainder trust

Affiliations:  1: Law Office of Gerald R. Nowotny.

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