Americans Renouncing Citizenship


At the US Embassy in London, there is a waiting list that none of the officials likes to discuss. On the list are Americans hoping to give up their citizenship, as they seek shelter from the Internal Revenue Service.

The rules are far less complicated than they were. A one-off exit tax is levied on all income and capital gains – this applies to those holding assets of more than $2m and includes pensions, deferred compensation, unrealised gains from properties and investments and interests in foreign trusts.

If you have less than $2m (€1.5m, £1.3m), you escape most penalties. “If you can get below that $2m net-asset-value snapshot, it’s fairly easy. You escape the exit tax,” says Richard Cassell, a partner at Withers, the law firm. “But few people want to write the cheque if they have more than that. It becomes painful.”

“Being American presents you with a very particular and peculiar set of problems from a tax perspective and over the next few years, it could get worse for the wealthy,” he adds.

Financial Times

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