Cross Border Matrimonial Matters

In a purely domestic context in the U.S., it is not uncommon for a spouse to cross state borders in search of a jurisdiction where he or she has sufficient ties to find the most favorable state law in which to file for divorce.

In the global economy, it is more and more common for foreign nationals living in the U.S. to review their options in various countries around the world.

It is important for the parties to the marriage to be aware that the U.S. has a very well developed set of rules that can trigger unforeseen tax consequences when a marriage is terminated. Many of the somewhat otherwise equitable rules that apply in the purely domestic context can actually result in a tax liability when non-residents are involved. These surprises usually occur when payments are made to a party who is no longer a U.S. resident taxpayer. For example, a transfer of appreciated property to a non-resident as part of a divorce settlement can trigger a U.S. income tax, payable by the transfer. Furthermore, alimony payments to a non-resident are subject to a 30% withholding tax(absent treaty relief).

Our firm can help you avoid these unpleasant surprises with advance planning.

Not every international taxpayer needs the kind of service and attention to detail that Christopher J. Byrne offers, but if the stakes are high for you, we firmly believe you should contact us.

To contact Christopher J. Byrne PLLC

(212) 239-1931