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Background

When a Global Assignment Became a Long-Term Move

A 42-year-old U.S. citizen relocated to Switzerland eight years ago on assignment with a U.S.-based pharmaceutical company. While abroad, he married a non-U.S. citizen spouse and decided to settle in Switzerland permanently.

Previously, U.S. tax preparation was handled through a corporate-assigned provider. While competent, the service lacked personalized guidance for his cross-border planning. Seeking a firm with both U.S. expertise and a local Swiss presence, he engaged KLR.

The Challenge

Navigating Investment, Pension, and Planning Gaps Across Borders

Following a recent job change and a significant income increase, the client and his spouse faced several complex cross-border tax issues:

  • Pension transfer complications: He transferred his Swiss Pillar 2 occupational pension to his new employer without understanding the U.S. tax implications or how to track his U.S. tax basis.
  • Capital gains exposure: The couple wanted to sell a portion of their investment portfolio to fund a 20% down payment on a chalet in the Swiss Alps, but the sale would trigger U.S. taxes even though the gains were not taxable in Switzerland.
  • Lack of personalized tax planning: While prior U.S. filings were accurate, they did not address the client’s long-term cross-border planning needs, leaving uncertainty about optimal strategies for wealth preservation and compliance.
How KLR Responded

Turning Complexity into Actionable Cross-Border Strategy

KLR’s International Tax Services team addressed the tax complexities, as follows: 

  • Reviewed prior U.S. tax filings and Swiss pension documentation to reconstruct the client’s U.S. tax basis in his Pillar 2 account and ensure future reporting accuracy.
  • Developed a cross-border gifting strategy that allowed the client to transfer appreciated shares to his non-U.S. citizen spouse, enabling the sale proceeds to be realized outside the U.S. tax net.
Key Outcomes

Preserving Wealth Across Borders

Pension Tax Exposure Eliminated: The individual was able to avoid over $300,000 in U.S. tax on his Swiss pension transfer by accurately reconstructing his U.S. tax basis in the Pillar 2 account.

Capital Gains Taxes Significantly Reduced: The client was able to reduce his U.S. tax liability on long-term capital gains by over $70,000 through a carefully structured gift of appreciated shares to his non-U.S. citizen spouse.

Experience Matters. Let's Connect.

When Life Goes Global, Tax Planning Must Follow

Cross-border tax issues can create unexpected exposure without the right planning. Our International Tax Services team helps individuals navigate complexity with clarity, confidence, and proactive strategies.

Kristen Howze

Kristen Howze, Director, International Tax Services

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