I’m considering giving up my US citizenship. It’s not a direct political thing (although I detest the current administration) although some of my reasons are overarchingly political. I detest filing US taxes for money I don’t earn there, the US having visibility of my bank account that I share with my husband (who is not a US citizen), the difficulty in financial matters and so on caused by the ridiculous tax policy of the US. In other words, I am sick of filing US taxes for literally nothing other than the right to vote - and really, I’m not informed enough locally to exercise that right, so I just vote in national elections. Which is fun and all, but you know, I’d give it up.
I have dual citizenship now. I have not lived in the US for more than 15 years. I have no real connection there - my relatives are dead or estranged. My Social Security is not worth claiming, and in any cause I have a large pension in one country already and a growing pension here.
I am never moving to a country without health care, decent holiday entitlements, worker’s rights, etc., which rules out my return. My husband would not move to the US for love nor money (and he was offered a job, so I know the money part is true).
We are likely retiring either here in the UK or in Australia. I love the UK and am considering citizenship when that time comes, but even so, I won’t be stateless. I’ve been an Australian citizen for 9 years, as has my son.
So…have you? Was it a hassle? Did you regret it? Let me know!
However, I remember reading an article about the tax implications. IIRC, things like unrealized capital gains, future estate taxes etc. can mount up quickly. I would research and speak to an expat tax attorney.
I have not, but IIRC, they still require filing for another 10 years.
I would talk to an attorney, although I can’t see how they could really enforce it. I think they are just interested in the big fish that try to avoid taxes, and not ordinarily people.
FWIW, I have dual citizenship having lived in Oz. I had no desire to give up my US citizenship. For the entire time living in Oz, I filed my US tax return, knowing I owed no US taxes (even though I has US financial assets). Yes, I did return to the US and the only “pain” is the annual FBAR reporting.
My only real caution to you is this administration’s paranoia. If you give up your US citizenship, and down the road desire to visit America (business, pleasure, transiting thru the country), it’s possible that a simpe legal infraction in your past, in the US or abroad, could permanently deny you entry. For example, a DUI conviction in the US bars you from entry into Canada. A once off binge where you live might forever deny you any trip to America.
True, but a DUI or other conviction would have worse consequences than that for me as a solicitor.
To be honest, I could wait out the current administration and see how that goes. Reading through your link there’s no real gotcha for me so long as I make it clear I’m not leaving to avoid taxes. This is true - I’d be taking on British citizenship and whilst I detest filing US tax, I’m not making any effort to avoid it. My net worth, etc. is such that I’m not caught by the Reed Amendment, either.
I have no US assets or liabilities, so it would be a wash. I’m just trying to get perspectives. I have literally no more ties to the US - my parents are estranged from me, my beloved relatives (my Grandaddy, Aunt and Grandmother) are all dead. Transition through is an issue I’d worry about, but we’ll see.
Thanks for your help (and everyone else in this thread). Still interested to hear other opinions/experiences.
You are closing a potential futue option for yourself. I understand tax filing is a pain, but keeping it is probably better. Unless you arem getting into some real high level citizenship linked job in your adopted country…
We’ve thought about it enough to discus the topic with people who have made the jump. One thing we’ve found is that none of the people we’ve talked with follow the letter of the law.
Is there a chance that your career as a solicitor might take you to partnership at a multi-national law firm? If so, you might wind up having to file tax returns in the US anyway, thereby negating any advantage from renouncing citizenship.
Can’t answer your question directly, Gleena, but here’s another point to consider.
Having US citizenship abroad can be a limitation in career paths. I have a friend who is dual US-Canadian, and he won’t be a signing authority for any banking accounts with his employer, because then the bank has to make reports on that account to the US. It’s not affected him, but I can see a private employer saying that they won’t hire a dual to a position with signing authority, because of the hassle it would cause with their banks. (And some banks are no longer offering banking services to Americans abroad because they don’t want the hassle either. )
My son is 25, my daughter 28. He is getting married in September, she is getting married when her SO’s medical residency wraps up a year from now.
Once they are on stable footing, assuming the US geopolitical situation hasn’t improved dramatically, we are outa here. My gf has started a gradual retirement, cutting back to 4 day weeks last year, then 3 day weeks next year. I’m working 5 day weeks but just four hour days.
I renounced my US citizenship about 4 years ago and it was pretty much all down to FATCA. I’d started working with a financial planner to sort out some investments for retirement. The funds available to me as a US citizen had an average annual return of around 3%. The funds available as just a British citizen have been averaging around 10%.
I did have to file tax forms this year however. When I lived in the US I worked for Boeing for 5 years and had a pension. Boeing are trying to reduce their future pension burdens so offered a cash-out option. I took it, and of course, the IRS withheld the maximum amount of tax from it. I had to file a 1040NR to claim a refund. A cheque for just under $5000 arrived last week.
I haven’t had to travel to the US since renouncing so can’t offer advice on that.
ETA: Check into the costs. It was over $3000 when I did it.
My only thoughts as someone planning on retiring outside the US…
A US passport has easy access to huge swaths of the world with minimal if any visa. It can also assist with helping get you bailed out in the event of major political upheaval/war in your country of residence.
Only? Only 4 points lower than Japan’s 180, so hardly much of a difference. But the UK is one point more and Australia two points less, so probably not much of an issue for the OP.
Is it as simple as you just choosing to renounce your citizenship?
I know that in the past, the US government had to accept your renunciation for it to actually take effect*. Is that still the case? Or does the government pretty much accept it automatically now?
*A specific example I remember is Lee Harvey Oswald. He tried to renounce his US Citizenship while living abroad, but the US did not accept that (though they didn’t reject it, either.). (Basically, the US Consulate involved just filed his application and didn’t take any action on it for several months. During that time, he got disillusioned with life abroad, and returned to the US.)