Rich Indians Seek Ways to Dodge 40% US Estate Tax Above $60,000
Updated
Updated · The Economic Times · May 27
Rich Indians Seek Ways to Dodge 40% US Estate Tax Above $60,000
1 articles · Updated · The Economic Times · May 27
Offshore trusts, insurance wrappers and RBI-approved restructurings are being explored by wealthy Indians to shield US stock holdings from a 40% US inheritance tax that kicks in above $60,000.
FEMA rules sharply limit those options: resident Indians generally cannot gift US stocks bought under the LRS to NRI children, and lawyers say even gifting sale proceeds or RSU encashments sits in a legal grey zone.
EB-5 planning is adding urgency before the September 30 grandfathering deadline, with some families selling foreign shares to fund the $850,000 investor visa route for children.
That funding path is also constrained by remittance rules—residents can send only $250,000 a year under LRS, while NRIs can move up to $1 million from NRO accounts—pushing some families toward risky bank-account workarounds.
Advisers say the bigger danger is reactive structuring: transfers may escape scrutiny initially, but banks can later block repatriated sale proceeds if the original move breached FEMA.
Beyond offshore trusts, what regulatory loopholes are wealthy Indians exploiting to fund their children's US ambitions?
Caught between Indian law and US taxes, what is the hidden compliance cost for families sending wealth abroad?