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-   -   Pros and cons of being a USA citizen (https://britishexpats.com/forum/usa-57/pros-cons-being-usa-citizen-878509/)

kateinbrooklyn Jun 6th 2016 2:34 pm

Pros and cons of being a USA citizen
 
Hello -

I've lived in the USA for 15 years - came in on an L1B, got an H1B which I "converted" to a green card five years ago. I have a daughter who was born in the USA and has dual-nationality with the UK. I am now eligible to naturalize and am mulling over the pros and cons.

For me, the biggest pro is to have the security of being almost unconditionally able to stay here and being able to vote. I can't really think of any cons, although I'm wondering if being a USA citizen might have some tax implications. I stand to inherit some property in the UK, although hopefully not for a long time.

Is there anything else I should be aware of?

Many thanks,

Kate

Pulaski Jun 6th 2016 3:12 pm

Re: Pros and cons of being a USA citizen
 
I think everyone here who is a parent would advocate for having the same citizenships as your child(ren), thereby eliminating any risk of being separated.

Once you have had a green card for eight years the difference for tax purposes between being a citizen and a permanent resident is negligible (you are assessable for an "exit tax" if you give up either). A citizen is on the hook for tax returns for life, no matter where they live, unless they given up their citizenship and pay the exit tax.

Wintersong Jun 6th 2016 3:14 pm

Re: Pros and cons of being a USA citizen
 
You'll be liable to complete a tax return every year for the rest of your life, even if you move back to the UK (unless you renounce your citizenship). You'll also become liable for jury duty. Your inheritance will be subject to UK inheritance tax so unless it's a very large sum, you're unlikely to have to pay anything over here.

It was a no-brainer for us. Opens up a lot more options in the long term, brings stability to our position over here, and jury duty every few years isn't that big a price to pay ;)

Pulaski Jun 6th 2016 3:20 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Wintersong (Post 11966313)
You'll be liable to complete a tax return every year for the rest of your life, even if you move back to the UK (unless you renounce your citizenship). You'll also become liable for jury duty. Your inheritance will be subject to UK inheritance tax so unless it's a very large sum, you're unlikely to have to pay anything over here. ....

Inheritance tax is more of an issue at the state than federal level - only a few states have it, but it can kick-in at a surprisingly low level. IIRC NJ assesses inheritance tax starting at just $60,000.

I have always wanted to do jury duty, but I have only been summoned once, .... and then it was canceled before I even made it to court. :(

Wintersong Jun 6th 2016 3:45 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Pulaski (Post 11966320)
Inheritance tax is more of an issue at the state than federal level - only a few states have it, but it can kick-in at a surprisingly low level. IIRC NJ assesses inheritance tax starting at just $60,000.

I have always wanted to do jury duty, but I have only been summoned once, .... and then it was canceled before I even made it to court. :(

Didn't know that - glad I live in CA :lol:

My husband has been called twice since we became citizens (3 yrs? 4? I forget). I was called when we were just PR, so gracefully declined and haven't been called since - I wonder whether I've been taken off their list as ineligible and then not put back on.

Giantaxe Jun 6th 2016 4:26 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Wintersong (Post 11966347)
Didn't know that - glad I live in CA :lol:

My husband has been called twice since we became citizens (3 yrs? 4? I forget). I was called when we were just PR, so gracefully declined and haven't been called since - I wonder whether I've been taken off their list as ineligible and then not put back on.

I live in CA and I've ended up on a jury the two times I've been required to go to the courthouse. Second trial was a six-week murder trial; quite an experience.

durham_lad Jun 6th 2016 4:31 pm

Re: Pros and cons of being a USA citizen
 
We were in a similar position in 1998 when we decided to become USC's. We moved back to the UK this year and our 2 USC/UK children still live in the USA. It's good to have no worries about being separated from them for any reason other than our choice. The tax situation is a pain to manage but worth it - I think. (I haven't been through a tax year filing in both countries yet).

We have both had inheritances from UK relatives, well below the UK limits and it was not an issue at all. (We lived in Texas at the time, which has no State inheritance tax).

Giantaxe Jun 6th 2016 4:34 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by durham_lad (Post 11966387)
We have both had inheritances from UK relatives, well below the UK limits and it was not an issue at all. (We lived in Texas at the time, which has no State inheritance tax).

As a receiver of an inheritance, it would have been moot for you anyway.

durham_lad Jun 6th 2016 4:38 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Giantaxe (Post 11966389)
As a receiver of an inheritance, it would have been moot for you anyway.

Good to know. When I saw the comments above I thought maybe some States taxed the receiver. States do some goofy things, I still have to file and pay Louisiana taxes on a pension I receive from a Louisiana company even though I haven't set foot in the State since retiring 6 years ago.

themadpooper Jun 6th 2016 5:18 pm

Re: Pros and cons of being a USA citizen
 
Absolute no brainer unless a) you envisage your long term future elsewhere or b) have some strange aversion to pledging your allegiance to America. If nothing but to have the right to vote it's worth doing, a right not afforded to millions who already view themselves as American

mrken30 Jun 6th 2016 5:36 pm

Re: Pros and cons of being a USA citizen
 
The other thing with inheritance is that estate tax and inheritance tax are taxable differently in different States.
It is my belief is that Estate tax only applies where the estate is located, but I may be wrong.
Inheritance tax applies to where the beneficiary resides.

mrken30 Jun 6th 2016 5:38 pm

Re: Pros and cons of being a USA citizen
 
I would always want to have the same passport / nationality as my kids when I travel. Makes Visa applications easier as you only need to investigate Visa requires for USA citizens.
Also if you have your passports stolen on holiday you only need to deal with one embassy

Pulaski Jun 6th 2016 6:04 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by mrken30 (Post 11966453)
.... It is my belief is that Estate tax only applies where the estate is located, but I may be wrong.
Inheritance tax applies to where the beneficiary resides.

That is correct. :nod:

Originally Posted by durham_lad (Post 11966393)
..... I thought maybe some States taxed the receiver. .....

You are correct, some states do. As MrKen said, estate tax (if any) is levied where the estate was held, and inheritance tax (if any) where the beneficiary resides.

Giantaxe Jun 6th 2016 6:08 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Pulaski (Post 11966477)
You are correct, some states do. As MrKen said, estate tax (if any) is levied where the estate was held, and inheritance tax (if any) where the beneficiary resides.

Only five states have an inheritance tax.

Pulaski Jun 6th 2016 6:11 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Giantaxe (Post 11966480)
Only five states have an inheritance tax.

I think someone already alluded to that fact. :unsure:

Originally Posted by Pulaski (Post 11966320)
Inheritance tax .... - only a few states have it, ....


Giantaxe Jun 6th 2016 6:14 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Pulaski (Post 11966485)
I think someone already alluded to that fact. :unsure:

I was "improving" on the accuracy of your post. :p

Actually, I see Tennessee recently abolished its inheritance tax so the total is now four...

mrken30 Jun 6th 2016 6:16 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Giantaxe (Post 11966480)
Only five states have an inheritance tax.

Thanks for this info. It appears that Oregon inheritance/death tax became an estate tax in 2012. I had missed this change.

Asg123 Jun 6th 2016 9:18 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Wintersong (Post 11966313)
You'll be liable to complete a tax return every year for the rest of your life, even if you move back to the UK (unless you renounce your citizenship). You'll also become liable for jury duty. Your inheritance will be subject to UK inheritance tax so unless it's a very large sum, you're unlikely to have to pay anything over here.

It was a no-brainer for us. Opens up a lot more options in the long term, brings stability to our position over here, and jury duty every few years isn't that big a price to pay ;)


(Is there a typo (UK/US) here, or am I misunderstanding this?)

As I understand it, if one is a dual US and UK citizen and one dies when living in the US, one is subject to US but not UK tax, is this right?

mrken30 Jun 6th 2016 9:28 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Asg123 (Post 11966672)
(Is there a typo (UK/US) here, or am I misunderstanding this?)

As I understand it, if one is a dual US and UK citizen and one dies when living in the US, one is subject to US but not UK tax, is this right?

If you die in the US your estate will be subject to US estate tax. The beneficiaries will pay local inheritance tax if applicable. It gets more complex if your estate is in multiple jurisdictions.

Wintersong Jun 6th 2016 10:30 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Asg123 (Post 11966672)
(Is there a typo (UK/US) here, or am I misunderstanding this?)

As I understand it, if one is a dual US and UK citizen and one dies when living in the US, one is subject to US but not UK tax, is this right?

Sorry - I was referring to a US citizen inheriting from an estate within the UK.

I just re-read the OP's question and realised that she was actually asking if there were any additional tax implications to being a citizen - to my knowledge, the answer to that is no: tax is levied in the same way whether you're a citizen or just resident.

Bob Jun 6th 2016 11:06 pm

Re: Pros and cons of being a USA citizen
 
Pros and Cons to Getting US Citizenship : British Expat Wiki

Asg123 Jun 6th 2016 11:18 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Wintersong (Post 11966759)
Sorry - I was referring to a US citizen inheriting from an estate within the UK.

I just re-read the OP's question and realised that she was actually asking if there were any additional tax implications to being a citizen - to my knowledge, the answer to that is no: tax is levied in the same way whether you're a citizen or just resident.

Sorry, I follow now, thank you.

Steve_ Jun 7th 2016 2:52 am

Re: Pros and cons of being a USA citizen
 

Originally Posted by Bob (Post 11966791)

There's some mistakes in that, maybe I should edit it. The issues with firearms have been done away with, various court cases established it was illegal to discriminate under the 14th amendment.

Also Selective Service applies to LPRs, no difference if you're a citizen.

Anyway my main comment was going to be about estate tax seeing as you're all banging on about it. Bear in mind this is the one huge tax advantage to being a US citizen. First off the limit is way higher than it is in the UK (federally) but bear in mind the US only has estate tax treaties with six countries and the UK is one of them.

As a result, say you live in the UK and your health starts to fail, you can get on a plane to the US and as soon as the US becomes your tax home the estate tax treaty kicks in: UNITED KINGDOM ESTATE AND GIFT TAX TREATY

It does say you've got to be in the US for 3 years to be considered domiciled in the US but hey, that's a lot less than the 7 year taper relief for UK IHT and it also says if you're a citizen of both countries and are domiciled in both countries then it boils down to where your centre of "vital interests" is located. So move to the US, move your vital interests and poof, away goes UK IHT.

To me that seems like a pretty damn big advantage to being a US citizen, if your estate is large enough to be hit by IHT.

Bob Jun 7th 2016 3:25 am

Re: Pros and cons of being a USA citizen
 

Originally Posted by Steve_ (Post 11966883)
There's some mistakes in that, maybe I should edit it. .

You should. It's been a while since it was put together. It's a starting point and covers most of the common ground that gets trotted out every time this question is asked, but hasn't been kept up to date in a while.

kateinbrooklyn Jun 7th 2016 3:39 am

Re: Pros and cons of being a USA citizen
 
Thanks everybody. You've certainly given me food for thought.

MarylandNed Jun 7th 2016 5:02 am

Re: Pros and cons of being a USA citizen
 

Originally Posted by Giantaxe (Post 11966480)
Only five states have an inheritance tax.

Six (NE, IA, KY, PA, MD, NJ).

Does Your State Have an Estate or Inheritance Tax? | Tax Foundation

kateinbrooklyn Jun 7th 2016 2:58 pm

Re: Pros and cons of being a USA citizen
 
Thank you. Very interesting.

kateinbrooklyn Jun 7th 2016 3:00 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by Bob (Post 11966791)

Thank you. Very informative.

mrken30 Jun 7th 2016 4:25 pm

Re: Pros and cons of being a USA citizen
 
There are also less restrictions being a USC if you are a student pilot.

SultanOfSwing Jun 7th 2016 4:35 pm

Re: Pros and cons of being a USA citizen
 
There really are no cons I can think of, but plenty of pros.

I know the tax liability comes up as a con, but even if you do return to the UK or end up in a third country, I am led to understand that it is pretty unlikely any US taxes will actually be owed. Having to fill in the tax return each year is a small price to pay for having US citizenship that will allow a return to the US at any time in the future with no issues other than the logistics of finding employment/accomodation.

Never having to deal with USCIS again is reason alone to do it :D

mrken30 Jun 7th 2016 4:41 pm

Re: Pros and cons of being a USA citizen
 
I agree. I think being a USC opens more doors than it closes.

And not having to update your address with USCIS everytime you move house is a bonus.

Giantaxe Jun 7th 2016 4:48 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by MarylandNed (Post 11966921)

I left off NJ (and one other) as they have both an estate tax and an inheritance tax and each has some form of credit from what is paid, if anything, on the former to the latter.

mrken30 Jun 7th 2016 4:50 pm

Re: Pros and cons of being a USA citizen
 
Maybe we should try to find a list of States not to retire too. My plan was to retire to WA due to no income tax.

mrken30 Jun 7th 2016 4:57 pm

Re: Pros and cons of being a USA citizen
 
For some a disadvantage is that you no longer travel outside of the US on vacation and lose the ability and opportunity to drive a manual car.

Englishmum Jun 7th 2016 5:00 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by mrken30 (Post 11967382)
Maybe we should try to find a list of States not to retire too. My plan was to retire to WA due to no income tax.

I've told my husband that we are definitely not going to be resident in NJ when he reaches retirement age! I've told him that we are going to spend our twilight years in England :wub:

I've noticed in my neighbourhood that there are hardly any old people....I used to have next door neighbours who were both teachers and had lived in the same house for 30 years. As soon as they had both retired they sold up and moved to Cape Cod, MA and I guess one of the major reasons for this is because of the estate and inheritance taxes.

rbackhouse Jun 7th 2016 5:03 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by mrken30 (Post 11967385)
For some a disadvantage is that you no longer travel outside of the US on vacation and lose the ability and opportunity to drive a manual car.

WTF are you talking about ?

SultanOfSwing Jun 7th 2016 5:10 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by mrken30 (Post 11967385)
For some a disadvantage is that you no longer travel outside of the US on vacation and lose the ability and opportunity to drive a manual car.

The vacation allowance/cost of travel is the same disadvantage for a permanent resident, of course.

Manual cars can be found though. I think Pulaski and Nutek drive manuals for a kick off.

rbackhouse Jun 7th 2016 5:15 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by SultanOfSwing (Post 11967392)
Manual cars can be found though. I think Pulaski and Nutek drive manuals for a kick off.

We have 3 in the family.

Pulaski Jun 7th 2016 6:42 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by rbackhouse (Post 11967394)
We have 3 in the family.

We do too, and no automatics. I have never owned an automatic, and neither has Mrs P, even before we met.

mrken30 Jun 7th 2016 7:18 pm

Re: Pros and cons of being a USA citizen
 

Originally Posted by rbackhouse (Post 11967388)
WTF are you talking about ?

I was making fun of a stereotypical American. My warped sense of humour


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