Managing cross jurisdictional tax obligations 

Issue 2, May 2024 I PCS Vision
High net worth lifestyles can be lived across many borders, complicating tax obligations. Read on to see how we are helping a successful family prepare for potentially substantial inheritance taxes, whilst safeguarding their liquidity and lifestyle.


PCS by Mercer client is a male shipping company director. In his mid-50s, our client enjoys good health and is married with two adult children.

The children reside in their country of origin, a jurisdiction with relatively high inheritance taxes, while our client and his wife reside overseas to continue pursuing business opportunities.

Key considerations

The couple have lived as expats for fewer than 10 years, so some tax laws from their home country remain applicable. 

The specific tax legislation of key concern to the client is one which treats the foreign assets of expatriates to the same inheritance tax rate as the domestic assets (if the expats have spent fewer than 10 years abroad). 

Our client's company is highly successful and growing year on year. So, he is concerned – if something unforeseen happens to him – his wife (and heir) would face a large inheritance tax obligation, which in turn, could compromise her lifestyle.

The couple has not decided on their long-term domicile.

PCS by Mercer Solution

After a close consultation process with our client and his wife, we presented several possible solutions, including variations of Universal Life (UL) and Whole of Life (WoL) plans. 

The client chose a WoL plan, which presents less long-term risk and better liquidity for his unique circumstances. Under the policy, whilst the client is the insured, his wife is the policy owner and payee. So, if the unforeseen occurs, she would then have the cash flow to meet her living expenses as well as any inheritance tax obligations. 

As part of his long-term strategic wealth planning, our client is also considering an additional insurance policy. That added policy would list his wife as the insured and his two children as the beneficiaries. It would help his children manage their inheritance when the time comes.


Total sum assured: USD 10M death benefit. 

Premium: USD 3.1M. The client’s unique policy has a 11-year breakeven point.

Key takeaways

  1. In addition to being a safeguard, our clients can consider life insurance policies as a source of liquidity. 
  2. By nominating his wife as the policy owner and payee, the client ensures that she receives the insurance proceeds and with the likelihood of paying considerably lower tax rate subject to no changes to the law in the relevant tax jurisdiction. 
  3. PCS by Mercer consultants will always present our clients with different solutions. We will also work with you to find and select the solution that is the most suitable for this precise moment in your life.
*This case study is based on a real-life family. Some details have been changed to preserve privacy.

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