79. Demats, PFICs and Provident Funds: What Indians Moving to America Need to Know

Moving to the US is an exciting step, but for Indians making that move, the financial complexity can be significant. From Demat accounts and Provident Funds to ULIPs, the assets that made perfect sense back home can quickly become compliance headaches, tax traps, and costly surprises in America. The good news is that with the right guidance – ideally before you arrive – most of these problems are entirely avoidable.    In this episode of Expat Wealth, Richard Taylor – dual UK/US citizen and Chartered Financial Planner – is joined by Manasa Nadig, Enrolled Agent and owner of MN Tax and Business Services, and co-host of the International Money Cafe podcast. Together, they walk through the most common Indian financial assets held by expats in America, what US reporting rules apply to each, and why pre-immigration planning can make the difference between a smooth transition and years of non-compliance.  Richard and Manasa discuss:    The four main Indian asset categories that matter for US tax purposes: Bank accounts, Demat accounts, Provident Funds, and insurance policies each carry different reporting requirements under FATCA and FBAR. Manasa breaks down what each one is, how it maps to more familiar US equivalents, and why simply not knowing about them is no defence with the IRS.    Why Demat accounts and ULIPs may trigger the PFIC problem: Mutual funds and unit-linked insurance policies held in India are typically classified as Passive Foreign Investment Companies under US tax law, bringing punitive tax treatment and complex annual reporting. Richard and Manasa explore why these are so hard to unwind once you are stateside, and why catching people before they arrive is so much more valuable than cleaning up afterwards.    Inheritances, gifts, and real estate – the traps people miss: From inherited property in Mumbai to gold jewellery gifted by grandparents, assets crossing borders often trigger Form 3520 reporting requirements that catch even well-intentioned expats off guard.     Richard and Manasa explain what needs to be reported, what the actual tax consequences are, and why failing to report can be far more costly than the assets themselves.    --    Expat Wealth is supported by Plan First Wealth. Plan First Wealth is a Registered Investment Advisor serving fellow expatriates and immigrants living across the US on matters such as retirement planning, investment management, tax planning and non-US asset management.  https://planfirstwealth.com/    --    Expat Wealth is affiliated with Plan First Wealth LLC, an SEC registered investment advisor. The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Plan First Wealth.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that listeners seek their own advice in these areas.