US Citizen

mebu60

nottsphil said:

Emmia said:

https://uk.usembassy.gov/loss-of-u-s-citizenship-i-e-expatriation/

So you have to pay what can only be described as a fine of $2,350 for giving up your citizenship. That's outrageous! 

This thread reminds me of when you were asked if you had Canadian citizenship, although that may have been only for buying shares.

Costs £482 to renounce your UK citizenship  Bargain!! 

EdSwippet

QrizB said:

Isthisforreal99 said:

She could always renounce her US citizenship?

I read recently that, as part of the process to renounce US citizenship, you have to show that your US tax returns are up to date.

Actually, no. It's a commonly held belief, regularly put about by tax preparation industry misinformation, either in ignorance or (more likely) because it helps their bottom line. And you can find it in a lot of different places. But it's wrong.

Renunciation is handled by the State Department, entirely separately from the IRS, and while they will very probably "remind" you of your tax obligations when you renounce, there is absolutely no need to be compliant or otherwise "caught up" or "up to date" with your US tax on the day you renounce US citizenship. There is no tax check either on the day or before. You can renounce citizenship first, and then think about cleaning up any tax stuff later.

On the latter point, it's worth noting that if you don't have any assets in the US, the IRS is relatively powerless when it comes to enforcing any tax debt it thinks a US expat might have on any of its many, many obscure and unreasonable tax laws that he or she may not have followed for some reason. It cannot for example impose a tax lien on any UK or other non-US banks or investment holdings. For someone who has lived enough life outside the US, is also a citizen of another country, and has little or no real or financial connection to the US, this can be a useful thing to bear in mind, since that may make any US tax cleanup somewhat ... um ... optional.

Divefrosty

To EdSwippet's point -  I'd heard this might be true, but wasn't confirmed about renouncing before completing the IRS returns.
For everyone else - We are aware of Facta and my mother has been filing tax returns for the last 5-6 years, because the UK Banks asked the question, which was the first we realised she needed to..... and indeed that I need to, so we both now do.
She's not had to pay any taxes really, nor did I. It costs more for Tax Accountants to fill the forms out than anything else in this process.
She was due to renounce but fell into ill health 3 years ago and now it's not possible to get her to the London Embassy, as she's unable to walk. Again another element that's annoying as there should be someway to do it online.

I do wonder, what could they do if she just stopped filing her returns, but at the same time, that’s not the issue, it’s what the heck is she supposed to do with her ISA’s and investments now they are locking down on this and she’s being forced to sell everything and will have to pay taxes under the UK tax allowances and also now the US.

poseidon1

nottsphil said:

Emmia said:

https://uk.usembassy.gov/loss-of-u-s-citizenship-i-e-expatriation/

So you have to pay what can only be described as a fine of $2,350 for giving up your citizenship. That's outrageous! 

This thread reminds me of when you were asked if you had Canadian citizenship, although that may have been only for buying shares.

An ex client of mine ( UK tax resident for over 35 years ) was similarly  unaware of how his American ( non compliant ) citizenship adversely impacted the tax treatment of a group of UK family trusts which included his children, after the implementation of FATCA.

To give up his citizenship and deal with IRS back taxes for 30 years, cost him in excess of USD 75,000.

American citizenship comes with very onerous tax compliance obligations, which I would say for many ex pats, negates the 'benefits' of retaining citizenship if you have zero intention of ever returning there.

eskbanker

Divefrosty said:

that’s not the issue, it’s what the heck is she supposed to do with her ISA’s and investments now they are locking down on this and she’s being forced to sell everything and will have to pay taxes under the UK tax allowances and also now the US.

She could follow the recommendations in an earlier post on the previous page, i.e. transfer the ISAs to companies that are happier to accommodate FATCA obligations?