Is my foreign rental property a specified foreign financial asset?
Held directly in your own name, it is not the kind of thing the class describes. The class is built from financial holdings — foreign accounts, foreign-issued securities, interests in foreign entities and certain foreign contracts. A building is none of those. The answer changes the moment the building is held through something: shares in a company that owns it, or an interest in a partnership or trust that does, are an interest in a foreign entity and squarely inside the class. So the question to answer is never “do I own property abroad” but “what exactly do I hold, and does anything stand between me and the bricks”. The rent is a separate matter and belongs on the return.
Does it matter if a foreign share is held through a US broker?
It matters, because the class lists foreign accounts and foreign-issued securities as separate heads. One head asks where the account is; the other asks who issued the thing inside it. A holding can answer those two questions differently, which is why two people owning the same share can be in different positions depending on how they hold it. Do not resolve this from memory, or from the name of the company. Take the holding, identify the issuer and identify the institution, then decide which head applies. Where clients go wrong is in treating “foreign” as one property of a holding rather than two.
Is my foreign pension an interest in a foreign entity?
Sometimes, and the plan’s name will not tell you. Arrangements called pensions abroad range from an account in your own name, to a contractual promise from an employer, to a beneficial interest in a separate fund with its own trustees. Those sit under different heads of the class, and one of them may not yet be a holding of yours at all. The classification has to be read off the plan rules and your member statement: who holds the assets, what you own, and what you can call for. Bring the documents rather than the annual summary — the summary is written to report a value, not to describe a legal interest.
Is my foreign life insurance policy with a cash value reportable?
Possibly. One head of the class covers certain foreign contracts, and the word doing the work in that phrase is “certain”. A policy that is pure protection, paying only on an event, is a different thing from one carrying a surrender value you can realise, and that difference rather than the label on the cover is what the classification turns on. The policy document and the latest statement of values are what decide it. This is also the head clients most often miss entirely, because a policy tends to be filed with the will rather than with the investments, and nobody thinks of it when listing assets.
Do I report a foreign asset that produced no income?
Yes, if it falls in the class. The class is defined by what you hold, not by what it paid you. A dormant account, a shareholding that has never declared a dividend, an inherited holding you have not touched — all of them are holdings, and none of them appears on a return as income. That asymmetry is the reason this class catches careful people: the return was right, the tax was paid, and the statement listing the holdings was never filed. When you build your list, work from what you own rather than from the income documents that happened to arrive in the post.
How do I value a foreign holding with no market price?
You establish a basis and you keep it. Unlisted shares, an interest in a family company, a policy value, a claim on a fund with no daily price: none of these has a figure waiting to be copied. What matters is that the figure you use can be explained — the source, the date, the method — and that the same method is used in the following year, so a change in the reported value reflects the holding rather than a change of approach. Write the basis down at the time you use it. Reconstructing why a figure was chosen several years later is far harder than recording it.
Is "fund transfer pricing" the same thing as transfer pricing?
No — and if you came here to calculate FTP, this is not it. Fund transfer pricing is a bank's internal allocation of funding costs and benefits between its own business units, a treasury and asset-liability management discipline used to measure branch or product profitability. Tax transfer pricing is about prices between legally separate related parties across borders, and about which country taxes the resulting profit. The words overlap; the fields do not. See our transfer pricing work.
Which country do I pay tax to first?
Generally the source country — where the income arises — taxes first, often by withholding before you receive it. Your country of residence then taxes the same income and credits what the source country took. That order is why timing matters: a residence-country return filed before the source-country tax is settled has nothing to credit yet. Getting the sequence right is most of the work. See international tax planning.
