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Number of US expats renouncing citizenship is soaring
| Published: | 8 Aug at 6 PM |
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In the first half of this year, over 3,000 UK expats cancelled their citizenship, an increase on the entire number in 2016.
Last year, just 2,999 Americans abroad gave up on their country and renounced their citizenship. During the first two quarters of 2017, 3,000 more followed, indicating that increasing numbers of American expats are sick to death of being treated as double-tax cash cows by the IRS. The federal crackdown on so-called tax evasion has hit hard on US expats living and working overseas, with many banks now refusing to deal with American account holders due to swinging penalties for even unintended mistakes.
America’s tax rules now insist that banks holding expat accounts must give full, private details of account holders to the IRS or face huge financial penalties, Most banks don’t want the risk involved, and are divesting themselves of their US citizen customers. US expats themselves are now aware how tricky the new reporting regulations can be, and are forced to employ professionals to make certain there are no errors in their returns. This and the risk of fines means renouncing US citizenship will save money for many Americans living and working overseas.
The USA is the only country in the world except for war-torn Eritrea which taxes its citizens on their overseas income. Expat group American Citizens Abroad has been fighting for change for years, with no result to date. During his campaign President Trump promised to repeal FATCA but, as with many other campaign promises, there has been no action. As regards citizenship renunciation, the rush to leave began to escalate immediately the new rules were introduced, with no signs of its reducing in the future.
At first, there was a feeling that giving up citizenship was politically incorrect, but now it’s seen as the only way to get out of an unfair trap which goes against the traditional American position on personal privacy. The only problem for those who owe penalties or back taxes is that these must be paid, and those holding considerable assets may well face an exit tax of between thousands and millions of US dollars.
Last year, just 2,999 Americans abroad gave up on their country and renounced their citizenship. During the first two quarters of 2017, 3,000 more followed, indicating that increasing numbers of American expats are sick to death of being treated as double-tax cash cows by the IRS. The federal crackdown on so-called tax evasion has hit hard on US expats living and working overseas, with many banks now refusing to deal with American account holders due to swinging penalties for even unintended mistakes.
America’s tax rules now insist that banks holding expat accounts must give full, private details of account holders to the IRS or face huge financial penalties, Most banks don’t want the risk involved, and are divesting themselves of their US citizen customers. US expats themselves are now aware how tricky the new reporting regulations can be, and are forced to employ professionals to make certain there are no errors in their returns. This and the risk of fines means renouncing US citizenship will save money for many Americans living and working overseas.
The USA is the only country in the world except for war-torn Eritrea which taxes its citizens on their overseas income. Expat group American Citizens Abroad has been fighting for change for years, with no result to date. During his campaign President Trump promised to repeal FATCA but, as with many other campaign promises, there has been no action. As regards citizenship renunciation, the rush to leave began to escalate immediately the new rules were introduced, with no signs of its reducing in the future.
At first, there was a feeling that giving up citizenship was politically incorrect, but now it’s seen as the only way to get out of an unfair trap which goes against the traditional American position on personal privacy. The only problem for those who owe penalties or back taxes is that these must be paid, and those holding considerable assets may well face an exit tax of between thousands and millions of US dollars.
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