International Herald Tribune

Saturday-Sunday, December 14-15, 2002 * 17

Expat advi ser

Wooden toys in vogue in Vienna Bequeathing property in France

By Gretchen Lang
VIENNA
land of hand-painted figures, knights and castles, farms, mar-
ket stalls stocked with hand-painted wooden fruits and vege-
tables (a market stall costs about ¤100 empty and another
Q. I’m an American citizen living in France and have
also acquired French nationality. I have two grown
children living in the United States and a wife and
It may be a good idea to talk with your children in the
United States about your situation. One option — although
this is not necessarily a sure thing — would be to get consent
hristmas is the time of year ¤100 stocked), wicker prams with fabric dolls, even brightly daughter in France. As I understand it, French law from them for you to leave your estate to your wife and

C when Vienna proudly de-

clares itself old-fashioned.
Clusters of little market
stalls spring up in the cobblestone
squares and church yards; people
stand in front of huge Christmas
trees warming their hands around
cups of gluehwein. The advent mar-
kets are stocked with old-fashioned toys, and toy shops
around town offer an even wider selection: wooden trucks
and trains with smooth edges for little hands, plush puppets,
painted tin cars, and colorful parrot and butterfly mobiles.
Natural and old-fashioned toys have, in fact, made a
comeback. There are even a few toy makers reviving the Ju-
gendstil toy designs of the 19th-century Wiener Werkstatt.
That was not the case 16 years ago when Esther Obwexer,
who owns the Lebens-Raum toy shop (Gentzgasse 112; tel: 470
27 01) , went looking for wooden toys for her children. She
and her husband, Herbert, had to go to country toy fairs to
collect hand-crafted toys. Eventually they opened a natural
toy store, with Herbert building wooden furniture to comple-
ment the hand-painted items imported from Germany,
Sweden and the Czech Republic. Today, the store is a wonder-
Chic and funky attire for kids in Paris
By Jessica Michault
PARIS
his is the time of year
painted wooden hair ornaments and necklaces.
Mädchen und Buben (Sevitengasse 4A; tel: 968 62 33) has a
small but charming display of old-fashioned items including
its own line of plush hand puppets and groovy rag-haired
dolls. Wurmspiel, on Westbahnstrasse in the 7th district, has
a selection of wooden dollhouses. The Spielzeugschatel
(Rauhensteingasse 5; tel: 512 44 94) offers a huge range of nat-
ural toys, including wooden board games, arts-and-crafts
items and wooden dollhouses and dollhouse furniture.
Many of these stores set up stalls in the city’s advent mar-
kets, the best for old-fashioned toys being the Altewiener
Kristkindlmartkt in Freyung Square in the old city. Check out
Roman Schneeweiss’s wooden toy stall for ingenious items
like a helicopter with blades that turn in the light, balloon-
powered boats and a little wooden gondola that can be rigged
to go up and down with little cloth and wire riders for ¤50.
The city’s huge Wiener Christkindlmarkt in front of City
Hall also has old-fashioned toys, although prices here are
higher. Also try the handicraft market in front of Karlskirche,
where you can buy wooden puzzles cut in the shape of trees
filled with birds and animals.
Gretchen Lang is a free-lance journalist based in Vienna.
10:30 a.m.-7:30 p.m.) the French-designed and produced
clothing has proved so popular that the shop now outfits
children up to eight years of age. A popular item this winter
is the baby bomber/pilot coverall with wool hood.
requires that my estate be divided equally among all of
my children. However, the grown ones in the United
States are both very successful and have inherited
large sums from my former wife. My own estate is
modest and will be needed by my wife and daughter
daughter in France, and then to have that consent drafted and
legalized by a notaire. With the permission of your daughter,
you may also be able to bequeath everything to your wife,
who can in turn see that it is shared with your daughter.
You should also ask your notaire about the option of trans-
here to live. Is there any way I can direct the proceeds ferring ownership of your property outside of France, so that
directly to them rather than split it among all three? your estate would not be subject to French inheritance laws,
The grown children are aware of my financial situation although the outcome of this can depend on where your es-
and probably would not challenge my decision to leave tate is probated.
whatever I have to my wife and child in France. If you already own property in the United States or else-
Wayne Bartsch, Fontainebleau, France where outside of France, then you may be able leave that to
your wife and child in France. If you do not, you may want to
A. You have already discovered that French inheritance consider buying such a property with the intent of leaving it
laws are quite protective of children. The original in- to your wife.
tent was to keep property in the family throughout the
generations, so spouses are not very well protected under the
current inheritance law. Creating a will saying that you want
to leave your property only to your wife and child in France
Q.
Many U.S. businesses only provide 1-800
numbers, but these numbers don’t work from
Greece. Help!
will indeed do you no good in France, since a percentage of
your property, the réserve légale, must be divided equally
among all of your children. The remainder is yours to do
with as you please.
A.
Welcome to the challenges of international dialing. In
Greece and most European countries, dialing 880 in-
stead of 800 will get you through. Depending on the
This percentage varies depending on the number of chil- country you are calling from, you may get a recorded mes-
dren you have, although there can be other factors that affect sage saying that the call is not toll-free. Note that you will be
the amount you can bequeath. Generally, if you are survived charged for the call, regardless of whether or not you hear
by one child, you can bequeath 50 percent of your estate else- this message. For 888 numbers, which are also toll-free in the
where. If you are survived by two children, you can keep one United States and Canada, try using 881 instead. For 877 num-
third. In your case, you can bequeath one quarter of your es- bers, try 882.
tate since you are survived by three children. For readers who find that these substitute numbers do not
This being French inheritance law, you must note that work or who need to contact companies that for some reason
there are many variables that could change the outcome. We do not provide an alternative for international dialers, then I
talked with Karen Perret, a U.S. attorney who specializes in recommend turning to the Web to look for an email address.
French inheritance law for people with ties in both countries. If your search is not fruitful, then you may have to resort to

T when the nickname ‘‘city

of lights’’ fits Paris best.
Streets are decked out in
Christmas lights and the major de-
partment stores put on their party
Papillon (1 Rue Saint-Simon; tel: 01 42 22 33 60; open 10
a.m.- 7 p.m.) is run by Eve Cazzani and caters to many
French celebrities. A friendly staff will help you choose
from a colorful assortment of ensembles for children who
want to look chic. Must-haves include gypsy skirts and Ro-
In France, property issues are handled by public legal offi- snail mail.
cials called notaires. Perret recommends that you find a
notaire with international experience. New legislation is
pushed through from time to time, so make sure that your
— Meredith Artley

Queries to the IHT’s Expat Adviser can be sent to

faces, with window displays to
rival the best visions of dancing
sugar plums for tots counting down
the days until Saint Nick makes his
grand entrance.
In the fashion capital of the
world, it may seem fitting to look at
chic clothing shops for gift ideas. But instead of trying to
buy a one-of-a-kind dress on the Avenue Montaigne that
might break the bank, think smaller. For proud parents,
children’s clothes from abroad are ideal gifts. And the qual-
ity of French workmanship could turn an outfit into a gift
that keeps on giving, as one generation passes on the Parisi-
an ensemble to the next.
At Charabia, (11 Rue Madame; tel: 01 42 22 45 45; open Tribune.
notaire is fully aware of your situation and works with you to athome@iht.com Also on IHT.com: Expat Web guide, a selec-
man blouses. take advantage of any changes in the law. tion of sites for expats.
If thoughts of French children’s clothing congers up im-
ages of Madeline, look no further than La Chatelaine (170
Ave. Victor Hugo; tel: 01 47 27 44 07; open 10 a.m.- 7 p.m.).
This tiny shop has the finest clothing for the upper crust. A
camel-colored wool jacket with mother-of-pearl buttons
and velvet trim will make the perfect gift for any little girl
wanting to dress up like her favorite French heroine.
For fun stylish clothes for children under 15, stop by the
store Jean Bourget (167 Rue St.-Jacques; tel: 01 44 07 03 48;
INTERNATIONAL HEALTHCARE
open 10 a.m.-7 p.m.). Kids will love the quirky clothes
covered in fancy buckles, cute buttons and funky pockets.
Jessica Michault is on the staff of the International Herald

Taxing matters

Year-end planning can cut costs

By Conrad de Aenlle ings. This works in many countries, but years, even if it means taking a portion
Kaltz said that some, notably Germany, of a payout this year when it might have
LONDON set allowances and tax bands based on been possible to defer it until 2003.
ear-end tax planning presents annualized earnings. Conversely, it makes sense, he said, to

Y potential pitfalls for expatri-

ates that more firmly rooted
taxpayers do not encounter.
Aside from contending with multiple
tax regimes, some of the steps to keep
bills as low as possible can be so obvi-
ous as to escape notice, while others are
counterintuitive and contrary to con-
ventional accounting wisdom.
The first item on the agenda is to es-
tablish where you are resident by re-
viewing where you spent your time dur-
ing the last year. Michael Kaltz, a partner
at Ernst and Young specializing in expa-
triate tax matters, says that countries
will typically claim someone as a resi-
dent if he or she has lived there for 183
days in the course of a year. That is often,
but not always, a calendar year. Some
countries employ tests such as whether a
home is owned in the new country.
It is possible for two or even more
countries to assign residency because
rules vary, and so do tax years. The
most notable example is Britain, which
for quirky historical reasons has a tax
year ending April 5. Multiple residency
seldom leads to hefty tax levies in more
than one place, however, as treaties be-
tween pairs of nations are usually in-
voked to determine which one gets first
claim on a taxpayer’s cash.
Once you take a foreign posting, and
figure out where you live officially, the
accountant’s mantra ‘‘accelerate ex-
penses, defer income’’ no longer neces-
sarily applies. That can be true espe-
cially in high-tax countries like
Norway, Finland and Denmark. They
tax foreign workers at lower rates than
their own nationals for a few years after
arrival, and it is essential to plan for the
day the honeymoon ends.
‘‘Where you are subject to tax under a
country-specific expatriate regime, the
regime may expire at the year end,’’
Kaltz advises. ‘‘Potential advancement
of payments will result in lower rates of
taxation before the regime expires.’’
Citizens of most countries escape
taxation back home once they leave, so
expats’ year-end planning should focus
mainly on liability to their adopted
country, consultants say. The United
States is the glaring exception: It con-
tinues to tax Americans on worldwide
income wherever they live.
There are various provisions that al-
low American expats to exclude much,
and in many cases all, of their earnings
from U.S. tax, but Jim Stidham, a part-
ner in the international tax practice at
PricewaterhouseCoopers, urged vigil-
ance against falling foul of an esoteric
device called the alternative minimum
tax. This is a sort of none-of-the-above
tax triggered when deductions leave a
taxpayer owing an amount deemed too
low — and expats are particularly sus-
ceptible to it.
‘‘AMT is sneaking up and biting a lot
of people who didn’t expect it,’’ Stidham
observed. ‘‘That’s true in the U.S., but
more so abroad. Credit for foreign tax
paid is where expats get nailed on it.’’
he first $70,000 of foreign income
T is excluded when figuring the tax
bills of American expatriates, and
further liability is offset by credit for
taxes paid to other governments. But
under AMT, only 90 percent of that
credit is allowed, so Americans living in
countries with higher tax rates than the
United States, who otherwise would
have paid nothing, may still receive a
bill from the Internal Revenue Service.
The good news is that, beyond the
$70,000 in foreign pay, $45,000 may be
earned before AMT kicks in; with those
exclusions, plus the usual deductions about business and investment.
and allowances that all taxpayers re-
ceive, expats making less than $125,000
or so should still get off ‘‘cheap.’’ The
trick, Stidham said, is for expats whose
earnings vary from year to year — re-
cipients of bonus or stock option in-
come or the self-employed — to smooth
postpone payment in cases where earn-
ings next year are expected to fall, say
due to a downturn in an employer’s
business. He cautioned, however, that
the date of any payout must be con-
sidered to be at the company’s discre-
tion. If a contract calls for the payment
to be made at a fixed time, the IRS will
not allow any flexibility that may pro-
duce a tax saving.
The same principle, but in reverse,
may apply to the timing of foreign tax
payments. It may seem better to make
them in December rather than the fol-
lowing January, so that the write-off
may be taken a year earlier. But if you
are likely to be hit by AMT this year, but
not next, then it may make more sense
to delay the payment so that full credit
can be obtained, not just the 90 percent
that AMT allows.
Stidham also suggested that American
expats facing tax liability back home
bunch such tax-deductible expenses as
charitable contributions, mortgage pay-
ments and so forth. Taxpayers may either
itemize or take the standard deduction, Move abroad in one easy step
whichever is more advantageous.
Write-offs can be maximized by
booking as many deductible expenses
as possible in even-numbered years,
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Some expats planning to return
home next year may wish to delay re-
ceiving income, hoping to benefit fully
from annual personal allowances and
lower tax rates charged on small earn-
them out in order to keep as much in-
come as possible below the $125,000 an-
nual threshold.
Stidham suggested spreading year-
end bonuses and the like over two
for a successful career abroad.
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