Goodbye, US Passport

 

 

 

” That’s not a concept that Americans contemplate lightly. But it’s one that many of them seem to be considering – and acting on.

The number of expatriates renouncing their US citizenship surged in the second quarter of 2013, compared with the same period the year before – 1,131 cases to 189 in 2012. It’s still a small proportion of the estimated six million Americans abroad, but it’s a significant rise.

The list is compiled by the Federal Register and while no reasons are given, the big looming factor seems to be tax.

A new law called the Foreign Accounts Tax Compliance Act (Fatca) will, from 1 July next year, require all financial institutions around the world to report directly to the US Internal Revenue Service (IRS) all the assets and incomes of any US citizens with $50,000 (£31,000) on their books. The US could withhold 30% of dividends and interest payments due to the banks that don’t comply.

It’s an attempt by the US authorities to recover an estimated $100bn a year in unpaid taxes on US citizens’ assets overseas. Unlike other countries, Americans are taxed not only as residents of the US but also as citizens, wherever they live.”