The number of people giving up their US citizenship to become British has surged thanks to complex tax rules introduced by the American tax authorities.
11:40AM GMT 02 Mar 2013
London-based American lawyers, who specialise in tax and immigration, report a threefold increase over the last five years in the number of American citizens who are giving up their citizenship – a process known as “renunciation”.
Also in the news today:
Fleeing Abroad May Not Cut Your Taxes
RESHMA KAPADIA – SATURDAY, MARCH 2, 2013
As anxiety rises about the increasing tax burden on the world’s richest, some boldface names have taken drastic steps. French actor Gérard Depardieu recently bid adieu to France and accepted Russian citizenship, and Tina Turner is giving up her U.S. citizenship for Switzerland. Golfer Phil Mickelson got an earful after publicly raising the prospects of making “drastic changes” due to California’s rising taxes.
Plenty of other Americans are considering similar moves.
for you Brokers who have done the “renunciation“ in the U.K. how much did you have to pay for legal counsel ?
Mike,
It depends on the complexity of the situtation and whether you are seeking an opinion on the tax consequences. If all you want to do is renounce – just make 100% sure that if asked, if you want to say answer anything, that you are NOT renouncing for tax reasons.
…..that you are NOT renouncing for tax reasons…… this is another crazy twist about freedom of speech/expression…etc. What would you do if you can save > $40K p.a. ,of course I renounce for tax reasons – I am sorry but what do I get in return ?
http://tellaine.deviantart.com/art/Freedom-of-speech-78564188
….opinion on the tax consequences….. of course they are potentially huge when you have 2 different nationalities invoved with kids etc.
@Mike
You are an American citizen. Your citizenship is priceless. For everything else there is Mastercard. No American citizen would renounce for tax reasons. If you want confirmation of this you need to talk to a guy named Reed – of Reed amendment fame. He will tell you that no American renounces for tax reasons. Mike, you are American. So, you are NOT renouncing for tax reasons.
So Mike, then get an opinion on the tax consequences – that’s a very good idea. But remember the issue is not what renunciation costs you, but what it saves you.
@ USCitizenAbroad ….. YES SIR !
the exit tax costs me so much that I would not break even > 15 years. There is one little door still open… I have to move to London and live and work there for > 1 year and during that time renounce… than it would be $0.00 but this is easier said than done at the moment.
@Mike
Seriously, be careul of the Reed amendment. It is one more thing that can always impose down the road – like FBAR. How can you turn the exit tax into a zero dollars?
You were born a dual citizen. You are a lucky guy. If the exit tax is that expensive, personally I think you should swim across the Atlantic if necessary.
The exceptions are dual nationals from birth, who have not lived in the US for more than 10 years of the last 15 and pay currently taxes in that non-US country
Call me paranoid but I still can’t help but wonder that if they’ll eventually start enforcing the Reed Amendment to deter potential renunciations. Someone recently offered me some pro-bono legal advice and warned me (especially as I’ve suffered substantial tax bills) that if I actually renounce that I’d be wise not to mention any specifics on here which seems very wise.
Most on here have either relinquished or renounced without any U.S. tax liability. But anyone here who has done (in that unfortunate situation) could theoretically be traced if the political climate subsequently turns really nasty.
US consulates and embassies could actually become revenue generators for the cash-strapped USG, especially if they can streamline the renunciation procedure. $450 and the possibility of a tax liability, regardless of how small, is still better than nothing.
Regarding the Reed Amendment: don’t answer any unasked questions at the consulate.
@monalisa1776, I expect the worst. 16+ trillion debt + bi-party system = screwed expats. Each and every American sides with Americans abroad when they hear our story and arguments. But, as a group, they loyally follow their party like lemmings. The government and the press seem to follow the same pattern of discouraging renunciations through misinformation without improving the system which is responsible for the problem. Of course, I could always be wrong, but that’s how I see it right now.
@Bubble, fair point made too. It’s why they will also try to vet potential relinquish to have to renounce so they can collect their $450 fee. Could also see them continue to streamline the process while also substantially raising the fee too. Who knows what’s going to happen….
@’Swisspinoy’, true too. I wouldn’t be at all surprised if they also change the rules and fees to make escaping far more difficult.
I can’t get the link to the Telegraph article to work for me. Maybe it’s only available outside the UK. I did search the Telegraph web site and amongst the results was this one, which I must have missed the first time around
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/8482355/Superman-announces-plans-to-renounce-US-citizenship.html
The link to the telegraph article doesn’t work for me either. Has the Telegraph been threatened same as Bob Woodward?
Looks like they removed the article, unless the server that it was on crashed due to heavy US traffic.
What a boneheaded , inflammatory article. Kapadia asks: “Does it make sense to flee the country?” More proof of Thomas Pynchon’s adage: “If they can get you asking the wrong questions, they don’t have to worry about answers”.
yes, the article appears to have been removed…puzzling. :/
amongst other things I just got an unsolicited e-mail from a tax attorney 🙂
saying : ……..Our primary business of offshore voluntary disclosure filings and opt-outs has generated a new sub-speciality of suing preparers for malpractice……
o.k. the land of opportunity is back with a vengeance: “new sub-specialities“ have been created out of OVDI…..
BIG BROTHER IS WATCHING ME HERE on Brockers … 🙂
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/8482355/Superman-announces-plans-to-renounce-US-citizenship.html
works fine for me where I am at 🙂
Two year old article unfortunately (dated April 2011). Shame they pulled the other one.
Lessons learned: if the word “renunciation” is included in an article, then copy-past the article to ones own hard drive, otherwise it will be deleted by the PC police