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Cincyscot55 Mar 21st 2014 12:14 pm

Giving up Green card - exactly what are the impacts
 
After much thought and discussion along with some initial planning my wife and I have decided we want to return to the UK probably in Fall 2015 (or latest date February 2016). We are UK nationals and were issued green cards in March 2009. I believe on both our proposed return dates we would still be classed as short term residents.

If my assumption is correct is it just a case of filing the appropriate form to "give up" our green cards - is there anything else required. Would we need to leave the US basically that day or would or British passports allow some time for final packing.

If it were Fall 2015 and we file the appropriate IRS form and leave USA would 2015 be last year for filing US taxes

Given we have been in USA since April 2006 and have green cards from March 2009 what date would we be considered long term residents. I believe it is after 8 years but just wondered if it applies back to the first day of the year you got the green card or if the fact we were in US for three years prior to actually getting the green card has any impact. I don't think we want to get near this date even though I don't think I qualify under exit tax rules.

Thank you in advance for all your help.
P.S. - may reason to give up green cards is that we will never be back to work in USA and I have a considerable lump sum pension (although that is 10 years off).

Guindalf Mar 21st 2014 12:29 pm

Re: Giving up Green card - exactly what are the impacts
 
As long as you are GC holders, your status is the same - legal permanent residents. If you leave, then your status is considered abandoned and your green cards are, effectively, revoked. There are no forms you need to fill in, just leave.

However, if you think you may possibly want to return sometime later (as a resident, not for a vacation), you may want to consider obtaining citizenship. You can still keep your UKC status, but this would allow you to travel unimpeded for the rest of your lives. You would need to file tax forms every year, but nothing would be due as UK taxes would be paid.

I'm sure if I have any of this wrong, someone will chime in, but I think this is a good starting point for you.

MarylandNed Mar 21st 2014 1:27 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Guindalf (Post 11183924)
You would need to file tax forms every year, but nothing would be due as UK taxes would be paid.

USC's are liable to file tax returns on worldwide income regardless of where they live. Whether they actually need to file a tax return or not depends on income.

Owen778 Mar 21st 2014 1:47 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Guindalf (Post 11183924)
You would need to file tax forms every year, but nothing would be due as UK taxes would be paid.

That's not necessarily true.

Duncan Roberts Mar 21st 2014 2:33 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Guindalf (Post 11183924)
As long as you are GC holders, your status is the same - legal permanent residents. If you leave, then your status is considered abandoned and your green cards are, effectively, revoked. There are no forms you need to fill in, just leave.

However, if you think you may possibly want to return sometime later (as a resident, not for a vacation), you may want to consider obtaining citizenship. You can still keep your UKC status, but this would allow you to travel unimpeded for the rest of your lives. You would need to file tax forms every year, but nothing would be due as UK taxes would be paid.

I'm sure if I have any of this wrong, someone will chime in, but I think this is a good starting point for you.

Permanent residents are also required to file tax returns and just leaving opens you up to the whole "did you/did you not abandon status" issue so you may still need to file returns. If you formally give up your status then that's not an issue. For sine who really have no desire to return to the US other than on holiday every now and again, that's a good option. For others who are not sure of the ling term future may need to consider other options.

Sally Redux Mar 21st 2014 2:42 pm

Re: Giving up Green card - exactly what are the impacts
 
I thought there was a form to revoke LPR status? We are in a similar position and planning to get a re-entry permit for daughter but give up ours.

MarylandNed Mar 21st 2014 3:34 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Sally Redux (Post 11184163)
I thought there was a form to revoke LPR status? We are in a similar position and planning to get a re-entry permit for daughter but give up ours.

There is. Abandonment of Lawful Permanent Resident Status (I-407).

http://london.usembassy.gov/dhs/uscis/abandon.html

MarylandNed Mar 21st 2014 3:38 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Duncan Roberts (Post 11184144)
Permanent residents are also required to file tax returns and just leaving opens you up to the whole "did you/did you not abandon status" issue so you may still need to file returns. If you formally give up your status then that's not an issue. For sine who really have no desire to return to the US other than on holiday every now and again, that's a good option. For others who are not sure of the ling term future may need to consider other options.

Well, sort of. If a PR is liable to file a tax return and doesn't, PR status can be lost. Hardly a big deal if the person's intention was to abandon PR status in the first place. However, it is probably safer and cleaner to file I-407 (Abandonment of Lawful Permanent Resident Status).

http://london.usembassy.gov/dhs/uscis/abandon.html

Steve_ Mar 21st 2014 3:44 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Cincyscot55 (Post 11183913)
If my assumption is correct is it just a case of filing the appropriate form to "give up" our green cards - is there anything else required. Would we need to leave the US basically that day or would or British passports allow some time for final packing.

You can file the I-407 with the embassy after you leave.


If it were Fall 2015 and we file the appropriate IRS form and leave USA would 2015 be last year for filing US taxes
Yes, but you would need to file dual status returns individually unless you leave on December 31st.


Given we have been in USA since April 2006 and have green cards from March 2009 what date would we be considered long term residents. I believe it is after 8 years but just wondered if it applies back to the first day of the year you got the green card or if the fact we were in US for three years prior to actually getting the green card has any impact. I don't think we want to get near this date even though I don't think I qualify under exit tax rules.
It's eight years from becoming an LPR, not entry. Read IRS publication 519, there is an example of how to do a dual-status return in the 2011 edition.


P.S. - may reason to give up green cards is that we will never be back to work in USA and I have a considerable lump sum pension (although that is 10 years off).
The usual trick in this situation is that one of you (the one who earns the least) applies for US citizenship and gets it before you leave, then the other one gives up LPR status.

That way you pay little or no US tax, plus the US tax filing is simplified, but you can still go back to the US e.g. to retire because you can be sponsored in.

Steve_ Mar 21st 2014 3:52 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Guindalf (Post 11183924)
As long as you are GC holders, your status is the same - legal permanent residents. If you leave, then your status is considered abandoned and your green cards are, effectively, revoked. There are no forms you need to fill in, just leave.

That's not right, only an immigration judge can determine if you have abandoned your status. You would get referred when you entered if the inspector thought you'd been out of the US too long.

Anyway, here's a story -

One of my relatives was an LPR back in the 1960s and 1970s, he left the US mid-1970s and didn't file I-407. At the time he was a high earner and worked for a large US corporation.

So couple of years later after he moved to the UK, he gets a letter from the IRS (I assume they got his new address from his former employer) saying he's going to be audited.

They sent a guy up from London, my relative didn't know how to fill in the forms, so the auditor helped him, they taxed him (large bill with penalties) - and he got a bill from the IRS for the help in filling in the forms.

Somehow I doubt nowadays they would be so fastidious but the moral of the story is - make sure you file the I-407!

They will always work things out in their favour. My relative told me he wouldn't have been so compliant if he knew how much he was going to end up paying.

Bob Mar 21st 2014 4:28 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Guindalf (Post 11183924)
As long as you are GC holders, your status is the same - legal permanent residents. If you leave, then your status is considered abandoned and your green cards are, effectively, revoked. There are no forms you need to fill in, just leave.

Which is why if one is sure about leaving, they should file to abandon their LPR status.

Cincyscot55 Mar 21st 2014 4:40 pm

Re: Giving up Green card - exactly what are the impacts
 
Thank you all - great advice and gives us a few more things to think about. Just one follow up please on the dual returns. If we say left August 30th 2015 we would file jointly, as we do now, for that tax year but anything else. The citizenship option for one is interesting but would that have any impact on UK tax.

MarylandNed Mar 21st 2014 4:55 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Cincyscot55 (Post 11184400)
The citizenship option for one is interesting but would that have any impact on UK tax.

Not really. You might need to file a US tax return on your worldwide income but you'd be able to deduct any tax paid to the UK. So you could end up owing no tax to the US.

Cincyscot55 Mar 21st 2014 5:46 pm

Re: Giving up Green card - exactly what are the impacts
 
Does you comment refer to my point on keeping one US Citizenship. If we go for the clean break option (file I407 and abandon status) then am I correct in saying after we file US taxed for year ended 12/31/15 we would no longer have to file any US tax returns. Clean break is our preferred option.
(Sorry I think I confused the issue a bit!!)

bewildering Mar 21st 2014 6:11 pm

Re: Giving up Green card - exactly what are the impacts
 

Originally Posted by Cincyscot55 (Post 11184533)
Does you comment refer to my point on keeping one US Citizenship. If we go for the clean break option (file I407 and abandon status) then am I correct in saying after we file US taxed for year ended 12/31/15 we would no longer have to file any US tax returns. Clean break is our preferred option.
(Sorry I think I confused the issue a bit!!)

What do you earn? Ballpark? There is an exemption for US taxpayers till 97,000 per person

http://www.irs.gov/Individuals/Inter...come-Exclusion


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