TYPICAL CASE SCENARIO:
Bill, 47, is a US citizen who invests $500,000 into foreign investments.
After 1 year, the investment is valued at $570,000.
Bill would have to pay approximately $21,000 in US tax.
In year 2, the investment is valued at $730,000.
Bill would have to pay approximately $48,000 in US tax.
Alternative TYPICAL CASE SCENARIO:
Bill, 47, invests $500,000 into a FATCA Compliant Individual Retirement Plan.
After 1 year, the pension pot is worth $570,000.
No tax is levied.
In year 2, the pension is worth $730,000.
No tax is levied.
In year 3, (at age 50) the pension is valued at $820,000.
Bill decides to receive a 30% lump sum of $246,000.
No tax levied on the investment gain and no tax is levied on the lump sum.
