Rubin on Tax: Maltese Pension Plan in the Sights of the IRS (July 4, 2021)

Charles (Chuck) Rubin, in his Rubin on Tax blog, discusses the Maltese pension plan which is a planning device for U.S. taxpayers to use the U.S. – Malta tax treaty to obtain tax deferral and tax avoidance benefits similar to a Roth IRA, but without many of the limitations of a Roth IRA. The article begins as follows:

The Maltese pension plan is a planning device for U.S. taxpayers to use the U.S. – Malta tax treaty to obtain tax deferral and tax avoidance benefits similar to a Roth IRA, but without many of the limitations of a Roth IRA. For more about it, search “Maltese pension plan” and you will find many sites touting its benefits.

For any of those involved with such plans or contemplating entering into one, they should take note that the IRS has added the arrangement to its 2021 “Dirty Dozen” scams list – at least as to transfers of appreciated property to the plan. Such planning generally treats the contribution of such appreciated property to the plan as a transfer to a “grantor trust,” thus avoiding gain generation. However, gain from such disposition is purportedly then not taxed immediately to the participant.

To see the full article click here: “Maltese Pension Plan in the Sights of the IRS”

Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal

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