Nigel Green, CEO of the deVere Group, has issued a strong statement of support for Boris Johnson, Mayor of London. Mr. Green is well known for his opposition to FATCA and CBT and has been a consistent champion for US Persons worldwide. Green declared, via his blog:
“Boris Johnson’s noble and brave stance against this fatally flawed, imperialistic and economically dangerous law, means he is legally in the wrong, yet morally he is right.
“Whilst I wouldn’t advocate that individuals do not comply with FATCA – instead they should explore all the available options to mitigate its adverse effects – I do hope the Mayor’s apparent FATCA crusade will serve as a call to arms to other high profile personalities to publicly express their opposition to this highly-polemical new law.”
Related articles:
http://www.nigel-green.com/2014/11/29/boris-johnson-still-refuses-to-bow-down-to-fatca/
http://www.nigel-green.com/2014/11/19/u-s-citizen-and-mayor-of-london-boris-johnson-slams-fatca/
http://www.funds-europe.com/news/14732-johnson-s-anti-fatca-crusade-is-noble-says-wealth-manager
As much as I support Johnson, I see no way he will get out of this one. He can’t expatriate while this remains unresolved. The IRS will just raise the penalties on him, and will definitely not concede anything because Johnson is such a high-profile case. And as Johnson cannot afford not to travel to the United States again, given his public position, all that’s left is for him to pay up. It’s a shame, but before complaining about the law he should have been better aware of how pernicious it really is.
@Expat Boris Johnson’s US tax bill for sale of his UK house is but a tip of the iceberg of taxes, penalties, and compliance. Some think that relatively wealthy people may afford compliance. The truth is that it could potentially bankrupt him.
Pay up. No, he has options, unlike all others. You are lacking imagination. I say he might ride this to higher office in the UK. The US dare not extradite him.
He is going to be our Trojan Horse. Laura Saunders (WSJ) called it early in a tweet saying that he may be the anti FATCA poster person, even though he has not publicly commented on FATCA.
@JC/@Expat, you are both correct in that Boris will be in a Mexican standoff between two competing interests.
The problem is that Boris got very bad advice after his 2006 passport incident. Why on earth did he renew his former child USPassport in 2012!!!
On another thread @AnneFrank posted a possible threading the needle. Boris would have to claim he was coerced into renewing, State would need to agree and I think they would solely for international relations. Then his problem goes away as he relinquished back in 2001 or so.
Hmm. I think BJ’s “noble and brave stance” against FATCA can more accurately be described as ignorant and foolish. He may, at one point, intentionally take a strong stance against FATCA, but I rather doubt it. I don’t think he realises the full scope of the problems he’s facing and was more or less just letting off steam without having given the slightest thought to what the consequences might be. I can well imagine that he’s somewhat less than thrilled about all the publicity his statements have brought forth since then. It will be interesting to see what “stance” he will actually take now, but I wouldn’t expect too much — and certainly nothing noble and brave. Call me an incurable pessimist.
Boris may not be fully aware of what he’s stepped in but I’m sure glad he stepped in it! We could not have hoped for more high-profile advertising for our cause. He could well end up, unwittingly, being our “Paul Revere” who sounds the warning to the undoubtedly still vast numbers who know nothing at all of any of this.
When Paul Revere made his famous ride he alerted his countrymen to the approaching enemy. His countrymen heeded the warning. Their response was to stand and fight and they created a nation as a result. We, as a community, are standing and fighting and we *will* win our freedom! Thanks to Boris our numbers, our visibility and our power have increased mightily during these past days.
Other known people with dual US citizenship that might be worth reaching out to:
Anne Sinclair
http://en.wikipedia.org/wiki/Anne_Sinclair
Louis Giscard d’Estaing, French Politician (actually his son: Pierre-Louis)
“En 1996, Louis avait épousé Nawal Ebeid, une Américaine originaire de Pasadena en Californie, décédée en 2011, et il est le père de Pierre-Louis, un jeune garçon de 13 ans qui a la double nationalité.”
http://en.wikipedia.org/wiki/Louis_Giscard_d'Estaing
http://caa.mauriceradiolibre.com/article93/louis-giscard-d-estaing
I doubt his father files his FBAR form for him! I wonder if his account will also be reported, given the fact that it is well known that his is American, or if they will just close their eyes on him because his father is a politician.
I am sure there are many others.
@MuzzledNoMore I hope Boris will become a Paul Revere. However, I suspect a lawyer has told him to shut up. I think it is even possible he has received direction from as high in the British government as the Prime Minister to keep his mouth shut about FATCA.
The trade off? His financial institution will have no record of his place of birth.
I hope I am wrong and that Boris will speak out and join the battle. But I’m not optimistic.
@no one Others: King of Thailand was born in U.S. 88 years ago when his father was attending Harvard. Princess Madeleine of Sweden lives in New York with her American husband and infant American-born daughter, making Princess Madeleine a U.S. Person and her daughter a U.S. Citizen.
My prediction: IRS will ignore them. As Foo said, they have smaller fish to fry.
A short list of other USC “big fish” that the IRS may best decide to ignore:
1) Georgios A. Papandreou, former Greek Prime Minister, Greece
Why: US born
Comment: Not to be confused with his father, Andreas Papandreou, who was also Greek prime minister.
2) Margaret Papandreou, nee Margaret Chant, mother of Georgios Papandreou
Why: US born
3) Children of Princess Grace of Monaco, Grace Kelly, Principality of Monaco
Why: Princess Grace was US born
4) Children of Mohammed Morsi, former Egyptian President, Egypt
Why: Two children were US born
5) Princess Ubolratana Rajakanya/ Julie Jensen, daughter of King of Thailand, Thailand
Why: US resident from pre-1972 to 2001, assumed Green Card holder or US citizen,
6) Queen Noor of Jordan/ Lisa Halaby, Jordan
Why: US born
Comment: Possibly relinquished.
7) Dame DeAnne Julius, economist, former Bank of England board member, UK
Why: US born
8) Princess Angela of Liechtenstein/ Angela Brown, Principality of Liechtenstein
Why: born in Panama, grew up in New York, likely a naturalized US citizen
9) Tor Peterson, one of the six Glencore billionaires, Switzerland
Why: US citizen
As a cautionary note, before the IRS sends its criminal investigators to Thailand to visit the King and his daughter, it should review Thai lese-majeste law and possibly watch the mini- series “Bangkok Hilton” with Nicole Kidman. IRS agents might expect the treatment mentioned in a recent Reuters article:
“Two senior Thai policemen face royal insult charges, a national police spokesman said on Sunday, and warrants have been issued for their arrest, the latest in a mounting number of lese-majeste cases following a coup in May.
Thailand’s lese-majeste law is the world’s harshest and makes it a crime to defame, insult or threaten the king, queen or heir to the throne or regent.
Those who are convicted face up to 15 years in jail.”
http://www.reuters.com/article/2014/11/23/thailand-lesemajeste-idUSL3N0TD04V20141123
I just posted this on Nigel Green’s site. Bit by bit the word will spread…….
Another available option to weaken the effect of FATCA is to help fight it in the courts.
The only active litigation is in Canada (Constitutional challenge of FATCA & IGA, see and please help support www dot adcs-adsc dot ca).
However, within the USA a legal mission to definitively prove that FATCA is unconstitutional will (hopefully soon) be mounted by Republicans Overseas and lawyer Jim Bopp.
@LM, thanks for posting that comment.
@ Innocente – Princess Grace nor her children are US citizens. Princess Grace had to renounce in order to marry Rainer.
I’m sure there are also quite a few sons and daughters of Chinese government officials and billionaires who are born in USA. It is increasingly common for these powerful people in China to arrange for their children to be born in USA. They keep a low profile.
Great comments, everyone, covering what his options are. We’ll know what his decision was if he enters the US again without renouncing.
The very worse thing he can do for the cause would be to comply and remain a US citizen.
I agree that any chance of relinquishment would be an easy fix for both the US government and Boris, but how will that construed by the public? Not very favourably, I think!
@Ann #1:
According to this 1957 newspaper article, the not-yet-born Prince Albert II was to be a US citizen:
http://news.google.com/newspapers?id=fKwpAAAAIBAJ&sjid=5vYDAAAAIBAJ&pg=4383,4662205
Then there is this statement in a recent news story about Prince Albert II:
“And if you are curious, Prince Albert’s twins won’t be able to claim American citizenship at birth. The Prince’s mother, the late Princess Grace of Monaco, held dual citizenship, but Prince Albert gave up his American citizenship when he became 21 years of age.”
http://blog.constitutioncenter.org/2014/10/monacos-twin-constitutional-succession-situation/
Would be interesting to know whether Princesses Caroline and Stephanie also give up their US citizenship. Princess Caroline is/ was married to Prince Ernst of Hanover, who is worth around £5 billion. But can’t imagine the IRS going after Princess Caroline or her (ex-)husband or any other member of the House of Grimaldi.
http://www.dailymail.co.uk/news/article-1342135/Princess-Carolines-husband-Prince-Ernst-steps-22-year-old-ex-dancer-models-brothels.html
@Ann #1:
Oops. The 1957 newspaper article was referring to the not-yet-born Princess Caroline (not Prince Albert II). Albert II was born in 1958.
@Innocente, the question is not so much whether the IRS will go after them. It is whether or not they’re going to be ratted out by FATCA… and then get automatic IRS notices. I wonder where the filtering out of these high profile people will happen. At the bank level? At their government level? Will they have a choice? Will the bank just accept the fact that if they have ‘local citizenship’ they won’t report them – in other words will dual be spared?
The IRS won’t do the filtering. I might be wrong, but I expect massive mass mailing of letters to non-compliant people once the data start flowing to the US.
That’s when the majority of people will wake up. The question is whether they’ll unite and rebel in their own countries, pay up, renounce, go public and when scandals will start popping up.
That, and when they’ll be some withdrawing.
Next year is going to be interesting….
Big article in Sunday Times (London) about the ‘Boris Tax’:
Crikey! American tax grab is outrageous
Thousands of Britons could, like Boris Johnson, be hit with a shock bill from the US taxman
Ali Hussain Published: 30 November 2014
BORIS JOHNSON’S battle with the US tax authorities has highlighted a little-known trap that forces thousands of British residents born in America to pay tax on the other side of the Atlantic.
In many cases, they have never worked in America, having moved to this country as children. Johnson, the mayor of London, left the US at the age of five. Like many of the people hit with big bills, he thinks the transatlantic tax grab is “absolutely outrageous”.
Anyone born in America is automatically granted citizenship, regardless of the nationality of their parents or how little time they spend in the country. As a result, they are potentially liable for US tax on their worldwide income and gains.
For example, they would not have to pay UK capital gains tax if they sold their main home here, but they could face a bill from the US taxman. The tax breaks on Isas, and the 25% tax-free lump sum withdrawal from pensions, could also be liable to US tax.
Johnson, who has dual citizenship, is being chased by the American authorities for a reported $171,000 (£108,260) bill on the profit from the sale of his family home in London in 2009. He has so far refused to hand over any money.
The Tory politician said: “They are trying to hit me with some tax bill. Can you believe it? It’s absolutely outrageous.” Asked if he would pay up, he replied: “Well, no, is the answer.”
Liz Zitzow at the specialist accountancy firm British American Tax said she sees “two or three” clients a year who had not realised they were breaking the law. “In some cases I have people in floods of tears because they realised for the first time that they had been evading tax.”
About 177,000 people living in the UK were born in America, according to the 2011 census. Patricia Mock, tax director at the accountancy firm Deloitte, said: “Someone can be a US citizen without ever having a US passport or without realising they are a US citizen.”
More people could be hit with bills because of the Foreign Account Tax Compliance Act (Fatca), which came into force in July. It requires banks and other institutions to inform the Internal Revenue Service, the US equivalent of HM Revenue & Customs, about accounts held by US citizens around the world if they contain $50,000 (£31,000) or more. Banks that do not comply may be fined.
The Fatca rules have been blamed for a surge in the number of people revoking US citizenship. Between 2001 to 2008, the number was 3,937. By contrast, the total was 9,566 between January 2009 and June 30, 2014, according to data from the US Treasury.
How much could I owe?
Under the “double taxation” agreements between Britain and America, individuals do not have to pay tax in one country if they have already paid the equivalent levy on the other side of the Atlantic. However, they may have to file a tax return in both countries each year.
Mock said: “A US citizen who is employed in the UK, spends all their time working in the UK and pays UK tax on their employment income, can claim a foreign tax credit on their US tax return for UK taxes paid or accrued on their employment income.”
As the top rate of federal income tax is lower in America at 39.6%, against 45% here, it is unlikely that any income tax would be owed there. However, it is possible to get caught out where US tax rules differ from the regulations here.
As mentioned earlier, if you sell your main home, known as your principal private residence, the whole gain is tax free in this country. In the US, only the first $250,000 of the gain is tax free (about £158,000 at the current exchange rate), or $500,000 if the property is jointly owned. To qualify for the US exemption, you must have owned and lived in the home for at least two out of the previous five years before the sale.
The rate of capital gains tax (CGT) depends on your American income tax bracket. The rates range from 10% on earnings of $9,075 a year or less to 39.6% on income of $406,751 or more.
Those paying the lowest rate of 10% are not subject to CGT. Those in the top-rate bracket will be charged CGT at 20%.
There may also be 3.8% investment income tax on top if your income, before deductions, is more than $200,000 in a given tax year.
For example, a single person who made a £300,000 gain on the sale of a home in Britain might have to pay US tax on £142,000 of the gain after the tax- free allowance of £158,000 was de–ducted.
With the top rate of CGT in America being up to 23.8% (including investment income tax), that is a potential bill of £33,796. More tax could be due if you benefited from any changes to the exchange rate between the time you bought the property and the date when it was sold.
There is also the example of the 25% tax-free lump sum withdrawal from a pension fund. There is no such exemption in the US, meaning you may face a heavy tax bill if you want to enjoy some of the fruits of your retirement savings.
For example, if you have a pension worth £500,000 and withdraw the maximum £125,000, the tax owed in America will range from £34,000 to £54,000, depending on your income tax bracket, according to Zitzow.
She said that British residents would also be liable to pay US tax on income and gains from Isas, which British citizens can enjoy without attracting the attention of HMRC.
What can America do if I don’t pay?
Failure to pay could result in a fine for late payment, although Zitzow said this was unlikely unless there was significant income or capital gains.
The Internal Revenue Service could also impose a charge on your assets in the US.
How much does it cost to revoke US citizenship?
You can avoid paying tax across the Atlantic by revoking your American citizenship. However, you will be subject to an “exit tax” — based on capital gains and income tax rates — if your average annual net income in the previous five years is more than $157,000, your net worth is $2m-plus, or you have not complied with all US federal tax obligations during the past five years.
Where an exit tax is triggered, the taxpayer will face an immediate charge based on the value of their property and investments if their assets had all been sold at the fair market rate on the day the individual stops becoming a citizen.
There is also an administration charge levied by the US State Department of $2,350. It leapt from the previous figure of $450 in September.
ali.hussain@sunday-times.co.uk
@Star – thanks for the post. Over at IBS Take Action > Comment at Current Media & Blog Articles – links here People could not crack that one as it only showed the first three paragraphs and wanted subscription. Did you comment on that post?
Ali Hussain joins the ranks of sloppy journalists who can’t be bothered to do the research and get the facts straight.
notamused: Could you elaborate on what facts Ali Hussain didn’t get straight? If there are others reading who are unfamiliar with the issue, perhaps learning about FATCA for the first time, I think it’s good for them to know if there are issues with the validity of information disseminated in the media.
@MuzzledNoMore
Sure.
“What can America do if I don’t pay? Failure to pay could result in a fine for late payment, although Zitzow said this was unlikely unless there was significant income or capital gains.”
This makes it sound like the penalty is just a slap on the wrist, when it could, in fact, mean financial ruin or even a jail sentence.
How much does it cost to revoke US citizenship?”
You cannot “revoke” US citizenship. There is simply no such thing. You can relinquish it, and one of the several means of doing so is to renounce it. Understanding the differences is crucial; misunderstanding them may have negative life-altering consequences. Many will be able to relinquish and have no US tax obligations whatsoever. The author should have at least pointed this out instead of propagating a non-existent term.
“You can avoid paying tax across the Atlantic by revoking your American citizenship. However, you will be subject to an “exit tax” — based on capital gains and income tax rates — if your average annual net income in the previous five years is more than $157,000, your net worth is $2m-plus, or you have not complied with all US federal tax obligations during the past five years.”
If any past taxes are assessed, they cannot generally be avoided by renouncing American citizenship. Those who relinquish may have a chance, if the expatriating act was long enough ago.
Regarding the “exit tax”, the $157K refers to the average net income tax, in the previous five years, not the average net income. (Obviously a huge difference.) Also, you don’t have to have complied with all federal tax obligations during the past five years to avoid the exit tax, that can be done after relinquishing/renouncing. Dual-born citizens are not subject to the exit tax.
There may be other errors in his article which I’ve overlooked.
Good point, but it should be made clear that the exit tax doesnt apply to duals at birth under specific circumstances. Regardlesss of that though, it will apply if duals like this fail to certify 5 years of tax compliance.
@ Innocente Wow! So what are they? A documentary I just saw reported that Rainer had to marry and quickly. Monaco was going to revert to the French. Grace had to renounce her citizenship in order for them to marry. I thought once you renounce any children born to you would not be US citizens?
notamused: Thank you for the details. Much appreciated. You read that article very thoroughly from which we all benefit.