“Clients are preparing for any eventuality,” ahead of the US election in November and the Supreme Court’s expected decision this summer in the Moore case, which will determine whether the government can tax unrealized capital gains (as it does through the exit tax).
Speaking to IMI’s Ahmad Abbas during Global Citizen Week in Cairo last month, Lesperance pointed out that Americans from across the political spectrum are drawing up exit plans.
“Some are worried about Biden’s taxation of unrealized capital gains or Senator Warren’s ultra-millionaire tax,” he says. “Others worry about political polarization, an increase in racism, anti-semitism, anti-islamism, mass shootings, etc.”
He says there’s a “variety of reasons why high net worth and ultra-high net worth Americans are anxious. Actually, a lot of Americans are anxious, it’s just that HNWIs and UHNWIs can avail themselves of more options.”
Lesperance expects the US Supreme Court to rule on the Moore case within a month or two and that, whichever way it rules, it will drive a large increase in US expatriations.
“If they eliminate deemed disposition, […] the major barrier to Americans leaving [the exit tax] is going to be gone, so you’ll see a lot of UHNWIs leave. If they adopt it and say that taxing unrealized capital gains is unconstitutional, that opens the door for the Biden billionaire tax and Warren’s ultra-millionaire tax. So, either way, you’re going to see a lot of Americans prepare.”
In the interview, Lesperance also details which countries he believes will become the biggest recipients of rich American expatriates going forward, as well as which special tax regimes in Europe are likely to absorb wealthy UK tax residents leaving the country now that the non-dom regime has closed and a return of the Labour party to the levers of power looks all but certain.
IMI Pro members can watch the full interview with David Lesperance in the IMI Pro Members’ Lounge.
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