GC Tax Trap
#1
Just Joined
Thread Starter
Joined: Sep 2012
Posts: 17
GC Tax Trap
I know this site is mainly used by British citizens and am not sure if this article applies to Brits also but could anyone possibly shed some low on the attached article especially the bit about having a green card for more than 8 years automatically liable to US Tax for life even if you give it up, thanks.
http://www.liveworkplay.com.au/packyack/GreenCard.html
http://www.liveworkplay.com.au/packyack/GreenCard.html
#2
Re: GC Tax Trap
I know this site is mainly used by British citizens and am not sure if this article applies to Brits also but could anyone possibly shed some low on the attached article especially the bit about having a green card for more than 8 years automatically liable to US Tax for life even if you give it up, thanks.
http://www.liveworkplay.com.au/packyack/GreenCard.html
http://www.liveworkplay.com.au/packyack/GreenCard.html
However, if you are a Long Term Permanent Resident (LPR) ie someone who has lived for 8 years out of the last 15 in the US and if you paid income taxes of around $130k for each of the last 5 years, have a net worth of $2M or are not up to date with your US taxes you will have to pay an exit tax and then will be taxed as a non-resident alien on US source income and gains under rules of Section 877.
So if you give up your green card and move your money outside the US the IRS cannot tax you, there was an old law where they sought to tax you for 10 years after expatriation, but that's gone now.
Last edited by nun; Dec 18th 2012 at 11:41 pm.
#3
BE Enthusiast
Joined: Nov 2012
Posts: 902
Re: GC Tax Trap
As nun notes this newsletter is riddled with innacuracies. The US expatriation tax changed in 2008; so this article is more than 4 and a 1/2 years out of date.
The current exit tax is usually simple to avoid with adequate planning.
The current exit tax is usually simple to avoid with adequate planning.