The number of Americans renouncing U.S. citizenship stayed near an all-time high in the first half of the year before rules that make it harder to hide assets from tax authorities came into force (FATCA – Effective Date July 1, 2014).
Each quarter the U.S. Treasury publishes the names of the Americans who officially expatriated during that period.
The number of Americans renouncing U.S. citizenship stayed near an all-time high in the first half of 2014 before rules that make it harder to hide assets from tax authorities came into force. A whopping 1,577 people gave up their nationality at U.S. embassies in the six months through June, according to Federal Register data published August 7, 2014.
While that’s a 13% decline from the year-earlier period, it’s only the second time there’s been a reading of more than 1,500, according to Bloomberg News calculations based on records starting in 1998. If this current trend continues, it would result in 3,154 people expatriating into 2014, which would be a 105% increase over the 2,999 people who expatriated in 2013. The 2013 amount of 2,999 represented a 221% increase over the 932 total in 2012 and “shatters” the previous record of 1,781 set in 2011.
Tougher asset-disclosure rules effective as of July 1, 2014 under the Foreign Account Tax Compliance Act, or FATCA, prompted 576 of the estimated 6 million Americans living overseas to give up their passports in the second quarter.
Swiss banks are trawling through records going back to the 1990s to find clients with U.S. addresses and telephone numbers, and those who received schooling in the country. Those identified as U.S. persons are either being asked to leave or placed in special U.S.-only sections of the institution, he said.
The U.S. is the only OECD nation that Taxes Citizens Wherever They Reside!
Shunned by Swiss Banks and Now FATCA Requirement on Foreign Banks, almost 9,000 Americans Living Overseas Gave Up their Passports over the past 5 years.
“I am so tired of paying all these taxes, I’m just moving to another country.”
This is something that’s usually said by really wealthy people to their tax advisers and financial planners. These folks tend to already have a lot of money in accounts outside the United States.
Now though, it looks like it’s not just idle complaining. Whatever the reason, government data shows that more Americans are packing up and permanently moving out of the country.
For those who already are living overseas, more are saying they don’t plan to return. They are renouncing their U.S. citizenship and giving back their US passports.
While giving up U.S. citizenship will free you from our worldwide taxation system, you’ll have to pay some pretty stiff taxes if that’s the reason you’re leaving the country for good. Many wealth citizens, who had an average annual net income tax liability for the five preceding taxable years (i.e., 2008 to 2012 for a 2013 expatriation date) that exceeds $155,000 (this amount is adjusted each year for inflation) (Tax Liability Test) or who had a net worth of $2 million or more as of the expatriation date (Net Worth Test) need to also consider that they will also be subject to an expatriation tax as though they sold their world wide assets on the date before their expatriation date.
Former U.S. citizens also will face difficulty in even coming back into the United States for visits.
And it’s a choice you can’t change. The State Department’s website page devoted to renunciation of U.S. citizenship elaborates on the rules and process of surrendering your American persona. The final section notes:
“Finally, those contemplating a renunciation of U.S. citizenship should understand that the act is irrevocable, except as provided in section 351 of the INA (8 U.S.C. 1483), and cannot be canceled or set aside absent successful administrative or judicial appeal. (Section 351(b) of the INA provides that an applicant who renounced his or her U.S. citizenship before the age of eighteen can have that citizenship reinstated if he or she makes that desire known to the Department of State within six months after attaining the age of eighteen. See also Title 22, Code of Federal Regulations, section 50.20).
Renunciation is the most unequivocal way in which a person can manifest an intention to relinquish U.S. citizenship. Please consider the effects of renouncing U.S. citizenship, described above, before taking this serious and irrevocable action.
So you better make sure you know all the costs, tax and otherwise, of no longer being a citizen of the United States.”
“Should I Stay or Should I Go”?