angelman

thanks for your very informative post..
Of course I realise that much of this is the territory of professional accountants etc. but its good to get some background info.
As for why I want to be a citizen. Well I really don't want to be a citizen but I have just married a US citizen and we are having a baby in a few months. In my line of work (movies) there are only a few places in the world that I can work and the work is getting increasingly global. One country's downturn is another's upturn. If work is slow in London then I always have the option if needs be of returning stateside for a few years to work. of course how this will play out with the family is another matter. Its a very changeable industry and can be highly dependent on factors such as government tax breaks which come and go with the winds. America tends to have a more stable base of work but isnt really where I would choose to bring up my children. So yes its all about hedging my bets

fatbrit

Non, je ne regrette rien.

How good do you actually think the IRS are at knowing what you earned outside the US? They find it difficult enough with domestic stuff.

penguinsix

This has changed, somewhat, for certain filers.

http://www.bdo.com/about/publication...triate7-05.pdf

Apparently, if you meet certain requirements, even if you give up a green card, you can still be required to file a US tax form (not a 1040, but a 8854) for 10 fricking years!

I'm not sure if you hit that level, but it does give you an idea of the evil reach of the IRS.

By the way, isn't there a 10 year travel ban to the US if you relinquish citizenship? I thought you were not allowed back in the US for 10 years if your give up your citizenship?

Celsius

Wow! Where did you read that?

Bob

It's a permanent bar.

Giantaxe

Exactly the reason I took out citizenship And as you are married to a US citizen that reduces the scope of the issue to income that is specifically yours - he will be filing a US return on his worldwide income anyway.

Hayley

Huh?? so my son who's dual if he decides he doesn't want the US citizenship he can't ever come back to the US again??

penguinsix

I've heard it is a ten year ban from a few people, but it can become permanent if you do certain things. However, I've also read that there isn't a ban technically, in some cases.

The fact is that renunciation is an extremely complicated process, and if you wish to reenter the US after doing so, you could go through several dozen layers of bureaucratic hell. There are websites that say you can come back (even the DoState) but there are others that say "when hell freezes over". And the taxes and military service obligations (draft registration) will follow you even if you are successful in renunciation.

The best advice I saw was "talk to an immigration attorney" especially if you hope to reenter one day.

p.s. I don't think parents cannot make the renunciation for their minor children--it has to be done by the child themselves when they turn 18.

jaytee

I wish I had done it and completed everything with it sooner.

plus, just doing it later is a headache.. trying to find or remember the POE and days/months/years involved

you are generally going to pay taxes where you live and receive your income

if you were taxed twice, can't imagine there'd be much left

frrussre

NO.
Reg. Frank R.

paddingtongreen

Any citizen can live in another country, without losing citizenship.

nun

I agree, but the previous comments about the tax implications of expatriation (giving up US citizenship) are a bit wrong. The rules change about a year ago and if your net worth is less than $2M the IRS assumes that you are NOT giving up US citizenship for tax purposes and you won't have to file for another 10 years like you use to.

Getting US citizenship has advantages if you are resident in the US, but if you go back to the UK it means that you will have complicated tax returns. Also the big financial issue is that as a US citizen its a very bad idea wrt taxation to own foreign mutual funds and you have to declare any foreign accounts over $10k to the US Treasury.

So if you plan to return to the UK I'd be wary of taking US citizenship as your invetsment options in the UK will be severely limited and your taxes will be complicated

angelman

you briefly mentioned a subject that i have never been clear about. You said that you have to declare any bank accounts with more then $10K in them. Several people I know have this situation including myself. The question being is that a total of all bank accounts or in any one account? I assume the former since otherwise one would just open a bunch of accounts with less than $10K in them

penguinsix

I think this is getting off topic, but there is some interesting stuff here.

I'm really not sure about bank accounts over $10k. The main reporting requirement deals with cash over $10k.

There is a famous court case about a guy who won like $50,000 in Las Vegas. Instead of taking one big payment for $50k, he structured several smaller payments for the purpose of avoiding the $10k cash reporting requirements. The courts found that you are guilty of 'structuring' if you conduct financial transactions, such as coming in with $9,900 instead of $10,000.

Here are some links of people found guilty of structuring:

http://www.northcountrygazette.org/a...006USAGas.html
http://www.irs.gov/compliance/enforc...129118,00.html
http://www.kscourts.org/ca10/cases/1997/07/95-1408.htm

and this, most recently:
http://lawprofessors.typepad.com/whi...ing/index.html

Ratzlaf Redux: Intent for Structuring

In Ratzlaf v. U.S., 510 U.S. 65 (1994), the Supreme Court interpreted the "willfully" element for a currency structuring violation under 31 U.S.C. Sec. 5324 to require proof that the defendant knew the structuring was illegal. Congress responded rather promptly to the Court's holding by dropping willfulness from the statute, so that now all the government needs to prove is that the defendant knows that the financial institution is required to file a Currency Transaction Report (CTR) for transactions over $10,000 in cash, and that the defendant intended to avoid having the report filed by structuring the transactions to keep them under $10,000.

nun

If the total of your overseas accounts is over $10k at any time during the year
you have to declare them all to the Treasury on a TDF 90-22.1

http://www.irs.gov/pub/irs-pdf/f90221.pdf

Penalty for not doing so can be up to $500k or half the value of the accounts! which ever is the greater.

Accounts means everything, banks, investment accounts, pensions, national savings etc.

So becoming a US citizen has serious taxation and financial reporting implications if you ever plan to return to the UK.

If to go to the UK and convince the UK that you are domiciled in the US there are some tax advantages. Still, unless you have family, retirement accounts, investments or SS payments in the US I'd think twice about US citizenship.