nun

Taxes are always personal and specific to the individual. For some who earn below the FEIE and have no investments or UK pensions there will probably be no tax due and coming into compliance will be relatively simple. But for expats with all but the simplest of financial situations the complications can quickly multiply. UK pensions, endowment mortgages/policies, ISAs or mutual funds that have not be declared on FBARs or tax paid on gains or correctly dealt with on US taxes are common issues. The FEIE will save many from tax on earned income, but unless the appropriate treaty positions and trust and PFIC forms have been filed for UK financial accounts then tax could be due because of gains that are not taxable in the UK being taxable in the US. In such circumstances professional advice is necessary to minimize US tax and chances of FBAR fines.

DaveLovesDee

I presume that also applies to a child born in the US who emigrated as a child, and who now returns as an adult but may have a different passport because of their parentage? So they must they'll be required to get one before they fly to the states, but wouldn't be required to fill out an ESTA?

Maybe US Passports should be handed out at the citizenship ceremony, or within a few days following. The cost to be included in the price of the Citizenship application.

They could even take away your old one as happens when you exchange your non-US driver's licence

Jerseygirl

Yes it applies to all USC's...and as USC's a US PP is all they need to enter the US.

DaveLovesDee

I guess it's no different really from most other countries, after all it makes sense to enter the UK on a British Passport and Canada on a Canadian Passport, even if you don't actually use the same passport to leave the country. The only difference is the the US seems to specify using the same passport to leave.

Does leaving just mean the passport presented at check-in, or does it include booking the ticket and gate boarding, and what happens if the passenger uses his destination's passport to clear immigration on arrival?

Jerseygirl

I enter the UK using my UK PP. I present my US PP when I leave the UK as the flight list is sent to the US authorities prior to take off.

MarylandNed

Correct - *all* US citizens must (by law) use a US passport when leaving/entering the US.

The first thing many new US citizens do is apply for a US passport. Many apply immediately after their citizenship ceremony i.e. they exit the building and head straight to the nearest post office.

You don't necessarily lose your existing citizenship(s) when you become a US citizen so often there is no need to give up any existing passports. This depends on what other countries you are a citizen of. I was already a citizen of Ireland, UK & Canada when I became a USC and still hold all 4 citizenships.

DaveLovesDee

Thanks. That mouse still has to go though

Jerseygirl

MarylandNed

The difference is a bit more than that. US law states that US citizens must leave/enter the US using a US passport. Canada and the UK do not have the same requirement for their citizens for leaving or entering. As a UK citizen, I have entered the UK on Canadian and US passports. As a Canadian citizen, I frequently enter Canada on my US passport.

Leaving means just that - using the US passport for all aspects of leaving. Once you get to your foreign destination, the US has no control over what passport you use to clear foreign immigration. The destination country will have its own rules & procedures.

MarylandNed

I've done the same but on a few occasions when departing the UK, I've been asked why there is no UK entry stamp in my US passport. So I've also had to show my UK passport when this happens.

DaveLovesDee

So the US makes you leave the UK on a US passport., causing hassle when there's no UK entry stamp. Seems a bit stupid to me, but I guess that's why I'm happy not to become a USC.

Jerseygirl

No they don't make you leave the UK using a US PP. The only requirements are that USCs leave and enter the US using a US PP.

MarylandNed

No - the US has no control over what passport you use when leaving the UK. Once while leaving the UK, I showed my US passport to someone during the boarding process after I had checked in. I don't know who he was but he definitely wasn't anyone with the airline - he was British and looked like a UK immigration officer. He asked me why there was no UK entry stamp in my US passport. I replied that I was also a UKC and had entered the UK on my UK passport. I was then asked to produce my UK passport. This has happened to me at least 3 times.

Steve_

You can't renounce citizenship unless you are in compliance with US tax laws anyway, so moot question.

Read IRS publication 54.

My personal view is that it is pointless to renounce citizenship in this situation, because you've got to pay all your back taxes to do it (if any) and if you've been a US citizen for more than 8 years you're subject to the 8854 requirement anyway, so you still have to file a non-resident tax return.

Once you've paid all your back taxes (if any) and if you're still facing a tax bill going forward it might make sense to renounce, but given that you live in Canada I would think long and hard on that one, because the likelihood of your wanting to say, live in the US, even in a vacation home is quite high.

Generally speaking in most cases, you have to file paperwork but there is little if any tax to pay, it's more a case of getting the hang of what paperwork to file. If you've never filed and have no SSN, then the IRS isn't aware of your existence, you apply for an SSN and they require seven years worth of returns.

The main exception is if you earn over the foreign earned income deduction, read the instructions for Form 2555.

There is also currently a campaign in the US to make it harder for people to renounce US citizenship for tax reasons, basically by making it impossible to reclaim it if you renounce it.

The whole thing is bloody stupid, imo. At some point reality will set in, but not soon.

Steve_

The transport regs do however require you to show you can legally enter Canada at boarding, British and US citizens can enter Canada without a visa.