IrisIsIris
2/24/2017 15:09 EST
We're preparing to return to live in Italy and become residents. We have access to banking privileges on US Military bases OCONUS - but it will be 1.5 hrs to/from base. We have several US homes, and have separated funding for those homes & our daily activities by using different banks & credit unions so it's easier to track. We are considering consolidating these accounts into fewer 'buckets' so they can accessed quicker/easier. We have lived in Italy (8 years) in support of the US Military, and we know that ATM's will not give (or did not give previously) US account balances, and that we'll probably have slow internet access there. Any guidance or other ideas?
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DoppioCittadino
2/25/2017 08:44 EST
Iris,
Speaking of your multiple houses in the US - a few years ago Italy implemented the IVAFE, a "wealth tax" paid on the foreign assets owned by Italian residents. The current tax rate is 0.20% of the asset value. And you will need to justify the claimed values thus possibly requiring additional expenditures for appraisals, etc.
See here for info: http://www.spectrum-ifa.com/italy-what-is-the-ivafe-foreign-assets-tax-and-do-i-have-to-pay-it/
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Umbertomar
2/25/2017 12:42 EST
I do not know how long ago you lived in Italy, but I have no problem doing banking in the US via the Internet in Italy. I have a few US accounts to pay US bills. I use Quicken for my hub. I also have an Italian bank account for local transactions. I have used TIM and Wind for internet. No problem at all. I can use almost any Bancomat to get cash from my US accounts.
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whidden39
From: NULL
2/25/2017 14:22 EST
DoppiaC, Always offering us useful info. Thank you. You had previously said that deposits held within an IRA are not subject to the wealth tax. Might you have a reference or source for that? This is a relief to me and I am trying to convince others that this is true. Also, distributions from Traditional IRAs would be taxed by the US and then by Italy with a credit for what was paid in the US tax. Is this correct?
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DoppioCittadino
2/26/2017 07:51 EST
whidden,
Lol. If I could only get over my propensity to answer un-asked questions...
I do not recall ever seeing any official document which details the tax treatment of IRA/401k type funds, however I have been told directly by at least two different Italian accountants used to working with expats and have read of many other experiences.
I should add though that my conversations with accountants on this matter have always focused on our specific situation - our money being in a mix of tax-deferred 401k accounts and tax-deferred rollover IRA's.
You can think of this money as sort of "unrealized" income - it is not quite "ours" until we make taxable withdrawals. In that sense, it seems reasonable that the fund would not be subject to the wealth tax whereas the "income" (that is, withdrawals/distributions) would be subject to regular income tax.
Now, in all honesty, I cannot help but wonder if non tax-deferred funds (such as Roth IRAs) would be treated the same way. I suspect not - that is, I suspect that non tax-deferred accounts would be subject to the wealth tax but the withdrawals/distributions would not be counted as regular income.
Really, though, that is just a guess...
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IrisIsIris
2/26/2017 09:12 EST
DoppioCittiano,
Excellent point. We're thinking to create a family trust for many other reasons, and will need to have everything appraised again for that - any ideas on the time span (within a year?) of the appraisal's validity. One home has been recently gutted inside for a renovation - we're thinking to convert it to a storage spot for our stuff. So, an appraisal would probably come in low on that home. One of the others is going to be rented out for the duration, so there will be income generated there. The others are essentially minor homes on remote acreage.
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IrisIsIris
2/26/2017 09:24 EST
While the above was not specifically about the Wealth Tax and real estate - the info does round out for me an idea on why the W/T was attractive to legislators.
I can see/imagine that we may own US/etc. real estate and not realize a profit until it's sold - but it is an asset upon which we can leverage additional funding essentially out of the blue and invisibly to the Fiscales.
My thoughts as a retired bean-counter/fiscal analyst.
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IrisIsIris
2/26/2017 09:25 EST
We were there 2001-2009. So, a lot has changed I'm sure. At that time, we used a modem (!!!) for internet.
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stefanaccio
From: Italy
2/26/2017 13:54 EST
Back to banking question, I have found Service Credit Union to be very helpful. There are branches at US military bases in Germany; they do a good job with regard to online banking; and, most important to me, I am able to send money to Italy and to pay Iban bills in Italy (and the rest of europe) based in US $ and at a very low cost.
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IrisIsIris
2/27/2017 10:30 EST
Stefanaccio,
Good info on banks & transfers. As I'm sure you know, a few cents difference on the exchange rate can really add up when it's lease payments, etc., so will consider this as we move forward.
My son & daughter-in-law both work for US Banks, and have told us that OCONUS ATM activities withdrawing Euro's are often at a better rate as the US banks routinely roll-up the day's exchange actions and process them against other currencies en masse - getting a better rate.
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LisaC1
2/27/2017 14:10 EST
Check out Transferwise, as well. They do not charge an additional fee to send money over. We just used them for the first time to transfer money into the account of our new landlord for a deposit on the apartment we will be renting in September.
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rsetzer99
2/27/2017 14:14 EST
I've been using Transferwise for the last year or so. The transfer cost is quoted up front as well as the offered exchange rate. Transfers are in the recipient account within two days.
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