Liberty and justice for all United States persons abroad

The Isaac Brock Society

Category Archives: Tax Residency

The proper care and feeding of the Green Card – An interview with “long term resident” Gary @Clueit

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UPDATE 10 SEP 2018

Gary replied to this same post on the Citizenship Taxation Facebook Group. .

Gary Clueit In the example of the Covered Expat inheritance 40% tax on heirs I gave during the interview, I misstated that there was no credit available for any foreign estate tax or IHT paid, giving the UK as an example. Apparently, the amount due to the IRS can be offset by any amount paid to a foreign country. It makes no difference in my case, since my domicile is a country that has no estate or inheritance tax.

Also, only 4 OECD countries (Japan, South Korea, France, UK) have an estate tax equal to or more than the US. Every other country either has none (including 15 OECD countries), or is at a lower rate than the US. Which means, unless you are domiciled in one of the very few high tax countries, your heirs will still lose a significant portion of their inheritance.

It is one thing to pay death taxes where you are living/domiciled. It is an entirely different matter to have to pay anything to somewhere you once lived, left and paid an exit tax on ALL unrealized gains at the time. And zero credit for any increase in wealth since you departed.

Exceptionalism at its best!
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Brock project: Comparing the comments on the French version of the @LizT1 @USTransitionTax article to the comments on the English version

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Reference to the English version of Elizabeth Thompson’s recent article on the U.S. Transition Tax was posted here. A person in Europe found the French version and forwarded it.

The French version has far fewer comments. But, I thought it would be interesting to perhaps do a bit of translation and see if they are as ridiculous as the majority of the comments on the English version.

So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 4 – Conclusion

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cross-posted from citizenshipsolutions.ca

Part F – A “U.S. citizen” cannot use a “tax treaty tie breaker” to break U.S. “tax residence”. How then does a “U.S. citizen” cease to be a “U.S. tax resident”?

Q. I am a U.S. citizen. I do not live in the United States. I live in Canada. I am a Canadian citizen. How do I stop being subject to the all of the FBAR and other reporting rules, tax rules (including PFIC), life restrictions and inability to effectively invest and plan for retirement imposed by the Internal Revenue Code?

A. You relinquish U.S. citizenship. Please note that a “renunciation” is one form of “relinquishment”. In general, the date of relinquishment of U.S. citizenship is more important than the form of relinquishment of U.S. citizenship. A Certificate of Loss of Nationality (“CLN”) may or may not (depending on the date of relinquishment) be necessary to cease to be subject to U.S. taxation.

Q. In simple terms, where do I get information about the process of renouncing U.S. citizenship?
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So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 3

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cross-posted from citizenshipsolutions.ca

Part D – Different definitions of “tax residence” – Not all countries define “tax residence” in the same way

Q. What is the criteria that different countries use to define who is a “tax resident” of the country?

A. The circumstances that constitute “tax residence” will differ from country to country. Generally speaking “tax residence” is based on definitions of (1) “residency” (deemed and actual), (2) “domicile” and (3) (in the case of the United States and Eritrea) “citizenship”. Note that different countries may define “tax residency” differently.

Q. How can I learn the definition of “tax resident” for the OECD countries?

A. In an earlier post about “OECD tax residency” I referenced the following chart which summarizes the definitions of “tax residency” in OECD countries. (I suggest that you use these definitions as a “start” to your research and not as the “last word”.)

Q. What is the significance of the “OECD” and why does “OECD tax residency” matter?
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So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 2

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cross-posted from citizenshipsolutions.ca

Part B – The Combined FATCA/CRS Letter

This letter is particularly worrisome for Canadian residents (whether Canadian citizens or not) who were either born in the United States or are (otherwise) U.S. citizens or U.S. permanent residents (AKA Green Card Holders). Could this mean that they would be required to apply for a U.S. Social Security number?

What follows is a sample letter…

Dear Valued Customer:

We appreciate our relationship with you and we are committed to informing you about matters that affect you. We are writing today to inform you that changes have been made to the Canadian Income Tax Act (Part XVIII and Part XXIX), requiring TD to provide information about customers who have a tax residence in other countries to the Canada Revenue Agency (CRA). The CRA may then share information with other countries through existing provisions and safeguards under the Tax Convention.

To comply with this legislation, we have reviewed our records (eg. address) in order to identify customers who may be residents of other countries for tax purposes.”

Part C – “Tax Residency 101”: It’s about where you should be paying your taxes

Some Question and Answer …
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So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer – Part 1

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cross-posted from citizenshipsolutions.ca

So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer

Introduction – So, what’s this “tax residence” stuff about? What does “tax residence” mean?

In 2014, as people started to receive “FATCA letters” I wrote a lengthy post describing “What to do if you receive a FATCA letter“. Information exchange under the Common Reporting Standard “CRS” has begun in 2018. As a result, I am writing this post which is to explain what the CRS is and how it relates to the FATCA letter. It is important to understand that the “CRS letter is actually a combined “CRS/FATCA” letter which is more likely to be received than the original FATCA letter. I urge that those who have received a letter of this type to read this post PRIOR to seeking professional advice!!!


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