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It just got a little bit easier to buy your dream home in Monaco as new inventory comes to market.

https://www.bbc.com/travel/article/20250516-monaco...

At a mere ~$10,600/square foot, it is only priced at about 10x what Hawai'i island condos in the resort area are going for.

Monaco real estate is currently going for about 3–4 times what comparable properties cost in Newport Beach, CA. If anyone's interested, feel free to PM me—I'm in the process of obtaining residency here in Monaco, and there are quite a few hurdles to navigate.
It's particularly expensive for Americans. You need a local bank account, plus either a lease of at least 12 months or property ownership. I managed to lease an apartment for roughly 1.4% of its current market value (including all add-on fees).
Banks typically require at least €5 million in deposits to work with U.S. citizens. They often want that money to sit untouched in their accounts for 6–9 months (earning zero interest) while you complete the residency process, plus they charge a 40-basis-point custodial fee—and additional fees on top of that. It's quite an adventure.
Tax advantages? They exist, but they're situational—especially useful if your circumstances are unique or if you're a former CPA (like me) who enjoys a challenge. There's particular value in reducing estate taxes. It's ironic: many of us on this board started buying BRK 30 years ago, worried about Warren Buffett passing away before we had enough money. Now that we do have money, we're worried about us passing away and the estate tax hit.
Jim and Manlobbi know far more about Monaco than I do, but being American adds its own unique quirks and complications.

Hi Oscar,

I am not a tax expert, but if you retain your US citizenship won’t you be liable for US income tax even while residing in Monaco?

And surrendering your US citizenship can incur huge expatriation taxes for anyone with a net worth over $2 million.

Not sure how estate taxes work for US citizens not resident in US, but generous exemptions and loopholes mean even deci and centi millionaires pay little if any estate taxes.

If your net worth is $15 million and you're single, you can pass it on without paying any federal estate taxes.
That said, many strategies to avoid or minimize estate taxes involve giving up some control over your assets during your lifetime and/or accepting frictional costs, like reduced investment flexibility. At 77, I'm increasingly drawn to simpler approaches as I age—if I haven't found a better one by then, I'll likely explore those options. Simplicity has real appeal.
(On a side note, I caught myself again: Moving to Monaco isn't simple, and taxes aren't my primary motivation anyway. Though tax optimization remains a personal hobby of mine.)
On income taxes: As a U.S. citizen, you're taxed on worldwide income regardless of where you live.
One significant potential saving would be leaving California, which would eliminate the state's top marginal income tax rate currently 13.3%. California treats capital gains as ordinary income with no preferential long-term rate like the federal system offers.
For federal income taxes, living in Monaco could allow a meaningful amount of current income not being taxed but that is quite specific to my unique situation.
For now, these are all options I'm carefully weighing. Choosing between the sunshine in Monaco and the sunshine in Newport Beach is a tough call—but as they say, someone has to do it.
Thanks again to Jim, who shared wisdom helped supercharge my returns over the years.

Not sure how estate taxes work for US citizens not resident in US, but generous exemptions and loopholes mean even deci and centi millionaires pay little if any estate taxes.

Even without loophole, the estate tax doesn't(currently) kick in until an estate is larger than $15 million for a single person or $30 million for a married person. For planning purposes, it's basically 40% for amounts higher than the cutoff.

“One significant potential saving would be leaving California, which would eliminate the state's top marginal income tax rate currently 13.3%. California treats capital gains as ordinary income with no preferential long-term rate like the federal system offers.”

My late father weighed it all & kept it simple- 2 houses with primary residence in SW Florida with Zero state taxes & pretty close to kids & grandkids. Leaning towards the same strategy after a few trips around the sun, although I did live in the Aloha state (Oahu) post grad school for a year- it was truly a spectacular setting & experience!

Last time I was in Monaco was on a $300 1 month Eurail pass 40 years ago & crashed for a couple nights in a youth hostel, but it certainly was a wonderful setting and good fun.

Last time I was in Monaco was on a $300 1 month Eurail pass 40 years ago & crashed for a couple nights in a youth hostel...

About 50 years ago for me, when at 12 years old my brother and I were taken along on a year's sabbatical traveling Europe with our parents, as they acquired materials for their foreign language education professions. We parked our 17' campervan in one of the clearly marked "no overnight parking" beachfront casino parking lots. When the police politely knocked on the door, promptly at midnight, Dad pretended not to speak French when asked to leave. The policeman, in a great accent, simply switched to English, telling us we could drive a couple of miles to parking by the roadside, under a cliff in France where we were free to park. Woke up the next morning to an international hang-gliding competition overhead. The professionalism and courtesy of that rejection was a stark contrast to the only other time we were forced to move on from our free camp site, which was in what was then Yugoslavia. Even though Dad had put up a handmade USA sign in the back of the camper due to cautions that we would be received in Yugoslavia as unwelcomed Germans, in a nation that still held understandable grudges from a few decades back, the response from the police when Dad replied truthfully that he did not understand, was to waive their machine guns sweeping from our vehicle to down the road, shouting LEAVE! in German. Dad surrendered, as even if he hadn't understood the German, it would be impossible to be confused about the gesture. I loved Yugoslavia.

As we were parked in the casino lot in Monaco, we noticed all the stunningly dressed people heading in to gamble. Decades later, an executive from our Swiss part of the company came over to our side of the pond, and because of my language skills I was put on the entertainment portion of his stay outside of meetings. He wanted to go to Atlantic City to see the casinos, and while I got together a willing group to do so, I cautioned him to dress down and not expect Monaco. Indeed you were more likely to see homeless people walking around with heads down looking for fallen quarters on the floor. He sadly agreed with my assessment after our visit, clearly disappointed.

Thanks for the trip down memory lane!

IP,
part gypsy

not sure about specific Monaco taxes/estate taxes but if similar to France, estate taxes are the bear...I can argue I believe that I am going to be resident in France (Us_FR tax treaty) but tax resident in USA , for my heirs.this would make a significant positive difference to them. (They all live in UK.
Just not sure if I personnally can argue it well enough to the tax people in France and have not yet found anyone to argue it for me....

not sure about specific Monaco taxes/estate taxes but if similar to France, estate taxes are the bear...

Inheritance tax in civil code countries certainly seems very strange if you come from a common law background. The underlying logic seems to be that assets, like income, are a thing that morally belong to a household, not a person. Income tax in France is spousally joint, not individual. Since the notion is that the assets are already (in effect) collectively owned by right, the French government tells you how much of your estate you have to leave to each relative, with only a remainder you get to say anything about. (working from memory, if the number of children plus current spouse is N, you have to leave assets worth 1/(N+1) of your estate to each of them, and you get to pick where the last (1/N+1) goes).

Monaco is very mild by comparison. There is an estate tax, but only on assets you have in Monaco. The rate is a sliding scale based on degree of relationship: zero for spouse and kids ranging up to around 16% for wholly unrelated heirs. This is wildly attractive compared to the UK, though not as attractive as the relatively few rich places without inheritance/gift taxes. Canada, New Zealand, Australia, Austria, Sweden...

Of course the country of your citizenship might also levy some taxes. And, unknown to almost everybody, the taxes potentially owed to the domicile of the asset. A non-US-resident owning US stocks or property at death is subject to US inheritance tax on all of those assets, without the de minimis exemption threshold. Since the US doesn't generally know you've kicked the bucket, and non-US banks/brokers don't care, almost nobody actually pays this. If you like not to pay this but like to follow rules, it is best sidestepped simply by holding the assets via a holding company...since the company is the titular holder and a company can't die, there is no inheritance tax levied. Typically one would use a company in a jurisdiction without corporate income tax like BVI, though the paperwork is a lot more than it used to be.

Jim

This is wildly attractive compared to the UK, though not as attractive as the relatively few rich places without inheritance/gift taxes. Canada, New Zealand, Australia, Austria, Sweden...

And the US up to a very $30 Million. Keep in mind as well, that the cost basis of inherited stocks in the US resets to the Fair Market Value on the death of the original owner. If an estate over $30 Million consists largely of accumulated capital gains, you're in a sense just trading one tax (capital gains) for another (estate).

And, unknown to almost everybody, the taxes potentially owed to the domicile of the asset. A non-US-resident owning US stocks or property at death is subject to US inheritance tax on all of those assets, without the de minimis exemption threshold.

A great big thank you for this revelation. You potentially saved me a ton of money.

A great big thank you for this revelation. You potentially saved me a ton of money.

Well, maybe your heirs rather than you...
: )

A few years ago I looked up the figure for how much tax the US was actually collecting under this rule. I don't remember the exact number, but it seemed to be about the size of one big (but not enormous) estate. 8 digits. It's best to colour within the lines, but it's also interesting to note that in this case it seems that nobody is checking at all. Maybe that has changed or will change.

I suspect a common situation is that one spouse dies with a joint account, the surviving spouse simply moves assets from that joint account to a new account elsewhere in their individual name without remembering to tell the first institution about the death. This sounds dodgy, and is, but in some places it's almost mandatory: many wealth management banks will force the prompt closure of any joint account when one party dies...so if they find out, then while dealing with funeral arrangements you can be unable to pay your water bill. Not just a policy, the mandatory automatic closure is right there in the account agreement.

All of this more obviously applies to US real estate. It's the one asset class for which tax collection really works, whether for rent or capital gains or estate taxes: the government knows where it is, and it isn't moving.

Jim

A non-US-resident owning US stocks or property at death is subject to US inheritance tax on all of those assets, without the de minimis exemption threshold. Since the US doesn't generally know you've kicked the bucket, and non-US banks/brokers don't care, almost nobody actually pays this.

I apologize upfront if my confusion is simply due to not enough coffee yet, but I am confused by this. You are saying that if I, a US citizen, chose to reside in another country, our US assets will be taxed from dollar one if I die? If I am drawing SS by then, the gov't will most certainly learn of my death.

IP,
one of the many pursuing Canadian dual citizenship by ancestry

If you like not to pay this but like to follow rules, it is best sidestepped simply by holding the assets via a holding company...since the company is the titular holder and a company can't die, there is no inheritance tax levied.

I don't understand what you mean by this exactly. If you die and $100M in shares of Apple, Exxon, and assorted other stocks go to your heirs, you will legally have to pay estate taxes on the amount over the exemption. The exact same rule applies if $100M of shares of a random holding company go to your heirs ... the estate tax is still due.

In practice, people slowly shift ownership of "family" holdings (sometimes within a holding company) via various trusts, and other mechanisms, in the decades before they die to avoid as much of the estate tax as possible. But a simple holding company alone doesn't accomplish that.

You are saying that if I, a US citizen, chose to reside in another country, our US assets will be taxed from dollar one if I die?

No, this is not correct.

US Citizens, residing in the USA or residing outside the USA, receive a $14.58M exemption before estate tax kicks in. ALL assets, held anywhere in the world, in any form, are included.

Non-US Citizens, residing in the USA or residing outside the USA, receive a $60k exemption before estate tax kicks in. ONLY US assets are included. Some countries have tax treaties to alleviate double taxation, but not all.

There are approximately 430,000 people in the US with net worths over $30m. I'm certain many are here. I would be careful getting Estate Planning advice from an investment forum.

I have spent more than I care to remember on estate planning.

Green card holders also get the exception.

Aussi

You are saying that if I, a US citizen, chose to reside in another country, our US assets will be taxed from dollar one if I die?
...
No, this is not correct.
US Citizens, residing in the USA or residing outside the USA, receive a $14.58M exemption before estate tax kicks in. ALL assets, held anywhere in the world, in any form, are included.
Non-US Citizens, residing in the USA or residing outside the USA, receive a $60k exemption before estate tax kicks in. ONLY US assets are included. Some countries have tax treaties to alleviate double taxation, but not all.

Sounds right. But for "US Citizens" I would substitute the phrase "US Persons", which has a specific meaning to the IRS. You can be a fully taxable "US Person" without being a citizen. There are probably some rare circumstances that the reverse is true. Spies on assignment?

Jim

If you like not to pay this but like to follow rules, it is best sidestepped simply by holding the assets via a holding company...since the company is the titular holder and a company can't die, there is no inheritance tax levied.
...
I don't understand what you mean by this exactly. If you die and $100M in shares of Apple, Exxon, and assorted other stocks go to your heirs, you will legally have to pay estate taxes on the amount over the exemption. The exact same rule applies if $100M of shares of a random holding company go to your heirs ... the estate tax is still due.

No. For someone who is not a "US Person", a holding company incorporated outside the US is not "US property" subject to US inheritance tax just because it owns some US stocks. So I have been informed, anyway, and it makes some sense: they are looking for a US asset (most often a house or stock in a US company) owned by a natural person who croaked.

The general rule for US citizens is that you are probably a "US Person" to the IRS for life, so none of this discussion applies, you have to pay Uncle Sam his due ever year and as you leave the stage. Even renouncing US citizenship won't get you out of it if the reason is seen by the IRS as having been motivated by tax reasons rather than a "natural" reason like a second birth citizenship.

Jim

UK inheritance tax was mentioned upthread, it being quite onerous: 40% on anything over about 1 million pounds, some exceptions.

It is my understanding that the estate of a British citizen who was non-resident will only pay this on UK-situated assets. Anyone have different information?

UK inheritance tax was mentioned upthread, it being quite onerous: 40% on anything over about 1 million pounds, some exceptions.
It is my understanding that the estate of a British citizen who was non-resident will only pay this on UK-situated assets. Anyone have different information?

I think it changed (somewhat) last year.
I believe the answer is "Non-resident means inheritance tax on UK assets only", BUT still worldwide assets for a while after you leave the UK. Some kind of timeout based on how long you were UK resident??

But I believe many things which are false, so you had best check.

Jim

A great big thank you for this revelation. You potentially saved me a ton of money.

Well, maybe your heirs rather than you...
: )

No. I'm the heir in this case. My own heirs don't have that problem.

Even renouncing US citizenship won't get you out of it if the reason is seen by the IRS as having been motivated by tax reasons rather than a "natural" reason like a second birth citizenship.

I believe that if you cease being a resident and you revoke your U.S. citizenship, you break free of U.S. taxes after ten years. And then you also lose the eligibility for a $15 million exemption from the estate tax on U.S. assets.

No. I'm the heir in this case. My own heirs don't have that problem.

Out of curiosity: what will you do to get around the problem?

I think it changed (somewhat) last year.
I believe the answer is "Non-resident means inheritance tax on UK assets only", BUT still worldwide assets for a while after you leave the UK. Some kind of timeout based on how long you were UK resident??

You are correct, Jim, as usual.

https://www.gov.uk/inheritance-tax/when-someone-li...

If you’re based abroad, Inheritance Tax is only paid on your UK assets, for example property or bank accounts in the UK.

HM Revenue and Customs (HMRC) will treat you as being based abroad if you have lived in the UK for less than 10 years in the last 20.

I'm good.

Also: "Every individual, regardless of residence, has a £325,000 nil-rate band, meaning no IHT is paid on UK assets below this threshold."
OK to hold a bit of cash there. Going to get taxed on that flat in Kensington ;-)

Does anyone have an opinion if USD in a bank account is a US asset?

Aussi

Does anyone have an opinion if USD in a bank account is a US asset?

Good question. I'm pretty sure the answer is "no". The definition has something to do with "US-Situs Assets", which I think (?) kinda means things with an identifiable location in the US, which cash and bonds don't have.

My friendly neighbourhood AI suggests that cash *could* count depending where it's held, for example a distinction between bank (no), non-US financial institution (no), and US brokerage account (maybe?).

For most people, it's mainly property and shares in US companies/partnerships. It would include a necklace or painting physically sitting in New York.

https://www.irs.gov/individuals/international-taxp...

Jim

I'm a bit late replying but I didn't see anyone else mention this; could you gift money/assets now (or later) before dying? It seems to me that many people who are well off enough to worry about IHT could give a fair amount of their assets away early, which *may* avoid (some of the) IHT.

SA

I'm a bit late replying but I didn't see anyone else mention this; could you gift money/assets now (or later) before dying? It seems to me that many people who are well off enough to worry about IHT could give a fair amount of their assets away early, which *may* avoid (some of the) IHT.

Yes, of course! Just give away $15 million (2026 limit) to your heirs and all the rest to charity and you avoid ALL estate tax! That’s what I’m doing, except I am single with no living heirs at the moment (except maybe a live-in caretaker at the end who will receive a nice unexpected slug), so every bit is going away to charity, and not to Uncle Sam.

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