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About Starshollow

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  • Birthday 02/02/1967

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  • Location Starnberg
  • Nationality German
  • Hometown Munich
  • Gender Male
  • Year of birth
  • Interests finance, investment
    Tennis, Golf
    Reading (especially history, but also poems)

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  1. Steuerbescheinigung für die Krankenversicherung

    indeed, the tax info is sent out directly to the Finanzamt. And if you would hand in something by yourself, it would not count because the Finanzamt will only take into consideration what they'll receive directly from the health insurance company anyway.    Cheerio  
  2. German retirement and pensions

    well, if  set this up, the value of the property is (on the outside) greatly reduced because nobody would buy it at market prices if the tennants cannot be evicted until they die. That is one way to "poison the well" , financially speaking.  But you'll need a good lawyer AND a good tax advisor for this in order to make it audit-proof for the Finanzamt and, in case something happens to them in the first 10 years after selling the property to their children - Sozialkassen/ämter.  But it could be a way to do this.   Cheerio  
  3. Finally, their website also does not claim anymore to be licensed to offer advice in Germany... now let's see how our complaints against other companies with similar activities and behavior in Germany are going forward with the regulatory authorities in order to protect consumers in Germany.
  4. German retirement and pensions

      Couple of info and thoughts here for you, @brokenm   1. trusts do not exist in the German legal system. Hence you can not safeguard or protect anything thru a trust as you would in USA or UK. 2. yes, the main risk for your parents and, in extension, to their children is that one or both of them could become a case for 24/7 long-term-nursing care. While both your parents have been paying (probably??? -depending on when they lived in Germany and since when they have been paying to the German social welfare system thru public health insurance or private German health insurance) into the compulsory "Pflegepflichtversicherung", their costs are met about halfway (depending on where they are living, because the costs for full-time nursing care vary a lot within Germany) from this insurance coverage. Which still leaves for one person an average gap of 1500-2000 EUR per month (!) that would not be covered by the nursing-care insurance.  In order to pay for this, at first any existing income (pension income, interest or rents earned, dividends etc) will have to be used. If that is enough, it can happen that certain assets belonging to them need to be liquidated, too. There are a lot of court proceedings and verdicts ongoing and recently passed that deal in detail with what can be demanded to be sold in order to get the money for the nursing-care and what not. Now, if neither the income nor the assets of the parents are sufficient to cover the costs of nursing care, the state will step in and pay for it..for the time being. After some time they will then reach out to the direct-line children and demand to be repaid by them. If there are several children, they can just go after one and have them then share it out amongst them (which creates obviously a lot of tension among siblings in such a situation). So, even if you find a legally sufficient way to get the ownership of the property transferred to you, you'll be still potentially liable.  And any gifting would become a legal problems within the first 10 years if during this time your parents would become a case where expensive nursing care is required - i.e. the government could demand the money back because it would be considered unjust to make yourself poorer in order for the public/community to bear the financial burden. Same even if you buy the property from them for anything remotely below market-prices.    So, what can you do? 1. ask your parents to get quotes for additional long-term nursing care insurance that covers the gap between public compulsory insurance and the real costs. It may not come cheap since they are already in retirement, but it beats the alternatives. They can go for a "Private Pflegeversicherung" or a "Privates Pflegetagegeld" and there are specialized insurance advisors to assist them with finding the right solution for them.  That way they can protect themselves - because if just one of them requires nursing care, the other one can be in a lot of financial trouble suddenly, too - and their children from the unpleasant consequences of having to pay for the nursing care eventually. 2. get a lawyer in Germany specialized on estate/gifting laws to check, if and what steps can be taken to protect the property in such a case. It could well be that at least if one of them is still living there, that it is protected against selling..or not. Hence a solid legal advice is clearly required here. 3. your parents should also set up a number of authorization documents with a specialized lawyer or advisor for the case of one or both being incapacitated to rule and decide about their own life (dementia, coma etc) or finances. If they have, for instance, a joint bank account, it does happen now more and more often that if one is confined to long-term-nursing care and mentally unable to take care of finances, the courts nominate an external person as fiduciary to take over the finances. Which then suddenly means that the remaining spouse has no direct access to their bank accounts and finances anymore. There is a package of decisions/documents to set up in such a way that they are publicly notarized and available like a "Patienteverfügung" (which rule under which conditions, for instance, life-extending medical treatment shall be curtailed because without that the doctors have to keep the machines running even if you know that your parent would not have wanted that), a "Vorsorgevollmacht" which authorizes the other spouse or a child or any other third person to take over the legal responsibility for the financial and social welfare if one becomes unable to take care of this anymore   So, you guys have a lot on your agenda to talk about. These are usually very unpleasant talks as the oszilate around topics that we all like to avoid rather than face. But they are nescesarry and part of "estate planning" in Germany.   Cheerio  
  5. Freelancer pension and citizenship

    if you are required to show proof of adequate pension set-up when applying for permanent residence permit mainly depends on your age, AFAIK (but I am NOT a Visa-expert, I am afraid). You can't be asked to pay backwards into the public pension because nobody can pay backward voluntarily into the public pension in Germany. Only if you were actually obligated to pay but didn't , will you be forced to pay for past periods of time (like many freelancers/self-employed in teaching positions find out to their displeasure or people with an artist or journalist occupation who actually belonged to the Künstlersozialkasse all along).   If the Ausländeramt requires you to show proof of adequate pension provisions, you need to show 60+ months anyway of such contributions to the German public insurance, because only after 60 months you'll have an irrefutable claim to receive a public pension when reaching retirement (of course, if you already have had contributions to other statepensions in EU-memberstates, that could be counted towards the 60+-months, too). In order to avoid problems regarding the public pension, you can also simply set up a private pension plan that fulfills the local requirements to be used as a substitute for a public pension. What kind of private pension is acceptable as a substitute (i.e. how much you have to pay in per contract til age 67 and what form of the pension plan) depends very much on where you are located, i.e. what Ausländeramt is responsible for your application.   An experienced financial advisor who caters specifically or even exclusively to Expats should be able to guide and advise you accordingly. Several such advisors advertise here on Toytown, contribute to this Forum and have a proven track record of professional competence and caring...take your pick :-)   Cheerio  
  6. Health insurance for unemployed/returnees

      for once a short answer is possible: YES :-) (provided the German spouse is in public health insurance, of course ) Cheerio  
  7. There is a lot of grey zone here, even though a lot of foreign employers tread in it...   The US employer can either go thru the process of doing an actual secondment for your wife to Germany. That way they can keep her on US payroll, social welfare contributions and she'll only have to do her taxes in Germany, too.    Or she can be on a German-law-compliant contract with social welfare contributions etc in Germany. There are many providers of payroll services for such employers who do not have an establishment in Germany nor want one. So you can get things totally above board and legally sound without getting the US employer in any trouble.   Cheerio  
  8. What's up with Hallesche? (No response to communication)

    Let me do some checking and I'll get back with you. Could be that most plans I have in mind only offer DENTAL as an extra to an inpatient or outpatient coverage.  More later tonight...   Cheerio  
  9. Investing advice for an expat in Germany

    but @jeba, similar to derivatives (Zertifikate, in English also often labelled as "autocallable notes") where German investors fund out after Lehman  Bros' went belly-up that these bonds are at 100% risk of the issuing/underwriting financial institution/bank goes bankrupt. I would therefore only advise clients using such for monies they can put at such risks and when the investor has both the financial means and the investor-type-profile to stomach total loss of investment in the worst-case-scenario.    Cheerio  
  10. U.S.-based Investments For American Expats 2019

        There are many index funds and other investment funds on the market that do not actually invest into the stocks and shares that they should be based on. Instead, they work with swaps and Cods in the background to "mirror" the underlying index. sort of. That has mostly worked well during the last years when most stock-exchanges went up and showed not too much volatility. But when the next major "crash" or corrections of the markets comes, a lot of people invested into index funds/ETFs will see with some amazement that the value of their funds is not in line with the actual index anymore (called a "tracking error"). Small tracking errors are not so much of an issue. But if the bets on which the fund managers based their "mirroring " of the index suddenly explode in their faces (the "Big SHORT" anyone?) , then it can get bad and rather expensive for the investors who did not understand the difference between synthetic investment funds and a fully-replicating one. You want the latter, not the former.    Cheerio  
  11. U.S.-based Investments For American Expats 2019

    HI there, you do face indeed the following conundrums here: - yes, should definitely avoid Germany or EU-domiciled investment fund because the IRS considers them to be PFICS. Adn the tax reporting for such investment funds is a nightmare to behold for the US-tax advisor, who'll bill you for his many hours of work so much money that all potential profits simply evaporate.     - yes, many US-domiciled funds are not open for investors who have a residence outside the US. Or limited to certain countries outside the US to which the fund has made special opening allowances. the US-domiciled funds from Dimensional Fund Advisors, for instance, are currently not available for resident clients in Germany. Many of the US-domiciled funds at Vanguard, too. And so on. It is therefore important to filter out, which ones are ok with clients in Germany and which not.    - yes, many, if not most, US-based banks and platforms do not offer or continue to keep investment accounts to non-residents for fear of getting slapped on the wrist by the SEC regarding the "know-your-client" regulations against money-laundering. The basic understanding being, that they can't "know" the client (anymore) if the client is not resident in the US. While a lot of US-nationals then keep a residential address in the US for such reasons, it can always get into the open that they are not actually residents there anymore and we have seen then cases where accounts have been closed/canceled in the US because of that. At the same time, most German banks and platform have no idea how to open and keep accounts that are based entirely on US-domiciled investment funds. Particularly with passive investment funds, the potential profits for the banks in Germany are a way to low to make this an attractive business in any way or form. Plus, many banks are scared shitless regarding FATCA and reporting to the SEC and rather would not have any US-nationals as clients for investment accounts.   So, all in all, not an easy situation. What can you do?   - buy single shares and stocks. These are obviously not considered as PFICs at all. Downside: it is very hard to strongly diversify such portfolios yourself and you'll have to put in a lot of money to diversify and balance your risks. Plus monitor it yourself  - in Germany you could also invest using private pension insurance as an umbrella. If you pick a strictly fee-based pension insurance plan (so-called Netto- or Honorar-Tarife), you can keep the costs relatively low and use all kind of investment funds underlying for your investment strategy. However, there are only a few pension assurances active or based in Germany that will accept US-nationals as clients for investment-fund based pension plans. And among those there is currently only one that I know that offers only fee-based plans at all. Thankfully, it is a rather good pension company at least. According to @Straightpoop, though, it is not a 100% certain, if and how the taxation reporting in the US play out on those, but it is definitely less of a headache than mutual or other investment funds from European providers. - there is also the option to use special "offshore pension funds" on Malta, because Malta has a relatively new and modern double-taxation agreement with the US from 2010 that stipulates a number of bilaterally recognized pension schemes. Downside: many of these offshore pension plans come with extremely high upfront commissions and serious conflict-of-interest in the background due to the high kickbacks from the investments underlying these pension plans sold by the usual culprits, i.e. hard-nosed snake-oil-salespeople from pyramid-structure sales organizations. Out of the frying pan and into the fire, like.  But there are some fee-based plans available there, too, which can be an option, especially if you do not plan to stay in Germany very long.   - last but not least, you can also use the services of a specialized advisor who has a) a US-platform perfectly willing to serve to non-resident clients and b )  portfolios of solid passive investment funds domiciled in the US that will keep your costs low and allow for a well-balanced and widely diversified investment portfolio. Donwside here: you'll need to pay fees to the advisor. Which might not be such a bad thing if the advisor offers you good services and diligent advice.   I have recently seen some special investment products being sold from the Netherlands to US-expats all over Europe as the best thing since bread came sliced. Having checked them out, I have some doubts as to their use under a German taxation regime on one side and the inherent cost-structure on the other side. But for completeness, I wanted to mention those, too.   Open-ended real estate fund have the problem that they may cease to be tradeable or to pay out if the real estate market gets into problems as we have seen with a number of German real estate funds in the past after 2007/2008. Which then can lead to heavy lossed for the investors. though I would consider those a partial addition to other investments in certain circumstances and if the investor-type-risk-profile allows for such additional risks.   Cheerio    
  12. the tax law for foreign (I.e. US_domiciled) investment funds has changed as per January 2018.  That may well be why what has been done for your taxes in the past does not compare anymore to what the private services does now. Both German/European and foreign investment funds have now to report in Germany the difference between share price on Jan1st vs DEc 31st of a calendar year, dividends and interest awarded to that fund (regardless of if distributed or accumulated)  and if the fund is 100% into shares and stocks , a mix between stocks and bonds or entirely into bonds.   Not sure, though, how your US taxes - if you have to pay any at all that is - are then credited to the German taxation side of this. PandaMunich or Straightpoop are probably best suited to answer that.    Cheerio  
  13. Gift Tax and Mid-Year Move

    There is an additional bit of complexity here for you when investing: as US-nationals you'll have to prepare tax-declaration in the US for/with the IRS every year, too. While you probably won't owe any taxes to the US, you still have to declare. Which is why you should stay away from German or EU-based mutual funds, investment funds - including ETFs. because the preparation for the tax reporting in the US is a nightmare to behold and will cost you dearly in tax-advisor fees over there. Risk of PFIC for US nationals Which means that if you like to use investment funds (ETFs, for instance), you'll need to use US-domiciled ones only. Their reporting in Germany is, thanks to the changes in German taxation laws as mentiond above by PANDA, the same like German/European funds since January 2018. So, on the German taxation side of things, no disadvantage for you to use US-domiciled funds, but huge advantages on the IRS-tax-declaring side. Only problem is that many US-banks and platforms are not particulary fond of clients who are not residents anymore in the US for fear of an audit by the SEC with regards to their "know your client" regulations (due to anti-money-laundering laws). But some are still game.    In the end, you might want to get yourself a financial advisor who can deal with both sides, the US and the German one plus a good tax advisor with experience on both sides of the Atlantic.   Cheerio  
  14. That would be news to me...and would not make much sense, because since Jan 2018 the taxation of foreign investment funds and German/European investment funds has finally been harmonized, taking away a huge disincentive.   The only thing I can imagine is that the funds company in the US has disallowed the sale of the funds to German (Eu_) residents due to higher reporting requirements for the funds themselves. I currently can't, for instance, get my clients into US-domiciled funds from DFA (Dimensional Fund Advisors) because they need to have at least 50 Million USD worth of AUM then here in Germany to make it worth their while from the cost side.   Have you tried INTERACTIVE BROKERS, for instance ?   Cheerio  
  15. QROPS transfers - low in costs and transparent

      We thought long about whether we use a unilateral flat-fee for the transfer advice, an hourly fee base or a percentage base. All come with inherent pros and cons, none is the best for every situation imaginable. For instance, a flat fee can be rather harsh on those with smaller pension pots, because the value of the fee is then, of course, a higher percentage of their capital than the percentage fee per se. Hourly fees always leave people very uneasy as there is no definite final amount that you can run up. I know, I paid lawyers a lot of money that way in the past. Consequently, we opted for a mixed approach: an initial flat fee, which allows us to do the fact-finding and initial analysis/recommendation with our work been paid for no matter what the outcome/decision will be about the transfer. That, I think, is quite fair and currently in the market in Germany without competition. The flat fee buys per calculation for four hours of our time. That, too, is quite fairly calculated and I have numerous cases, where we needed to invest more time, actually. But all in all we are content with the setting of that fee. The 1.5% fee comes only after (!) the decision was made to move forward with the transfer. Again, an hourly fee might have been a solution here, but people who have come up with 2, 3 or more pension plans would then - given the same volume of transferable capital in the total, have to pay much more than people with just one plan. Because the workload in processing the paperwork for more plans is considerably higher.  Since most other companies I know charge 2.5 % or more, we think that we came up with a good value for our clients' money in comparison. Especially when comparing it to the normal German commission load for pension plans which still is in excess of 4%.   Just saying... So, yes, a percentage fee can create some awkward incentives in the right direction..if you let it. If, on the other hand, you have a long track record as we do for advising clients in their best interest (as can be shown be the many people we advised to take public health insurance instead of private health insurance, for instance, in past and present to give just one example) then there is no collusion of interest there at all. It all depends on your ethical and professional standards.    Cheerio