Fonsini

I'm at the early stage of this decision process and I'm looking for some advice.

A little background first.

I have lived and worked in the US for some 14 years now and it has been a great ride, but I have come to realize that the US is great for younger people and that now I have entered my 50s the advantages of living in the UK is swaying me in that direction, especially as I have more in the way of family and friends back in blighty.

I work in a profession that pays pretty well and I plan on working at least for a few years when I get home, and yes, I really don't want to pay double tax (over the $100k FEIE limit) and quite honestly I always hated doing tax returns anyway and have no interest in doing that for the rest of my life. So yes, this is all about tax and tax returns, mea culpa.

My thoughts would be that I return home, visit the Embassy in London, renounce my citizenship, surrender my passport, file my final years taxes, and wave the US goodbye.

All responses appreciated, even those that may give me the boot

Tegwyn

I gather you never plan to return to the US ever again - not even for a visit. It would actually make more sense if you went back to the UK and worked there for a while to determine if it is the final destination for you. Although you must declare income to the US, you may find that you comfortably break even or less to never having to fork over a penny. Still I find it rather sad that the citizenship was looked at as a mere convenience, and considered worth discarding because of mere lack of motivation to do a little paper work.

london_calling

What else is citizenship really about? You don't believe all that nonsense they make you go through at the ceremony do you?

scrubbedexpat091

The biggest con would be not being able to return to the US to live if so desired, and possibly affect travel to the US in the future if needed.

I was born there and spent my childhood in the US, and early 20's there, and while I don't plan on going back, I am not going to renounce over paperwork and tax issues, I just wouldn't want to lose the ability to live there again if I so desired, and I don't want to deal with the hassle of a foreign passport when entering the US, and the biggest reason, if I renounced I'd be stateless as I don't have Canadian Citizenship only PR status.

Hotscot

But it's nor just a matter of paperwork. Fonsini mentioned double taxation also. That may be an issue.

nun

First of all you won't be doubly taxed, but you will end up paying the higher of the taxes in the US and the UK.

If you have American family the immigration aspects of renouncing are a big negative. You don't want to be in a situation where you are separated from family because of visa issues. The other potential issue are changes to US law that might negatively effect non-US citizens. Back in the 1990s there was a move by a Sen. Simpson to restrict SS payments to non-citizens, but it died in committee. Still, if you have benefits and money in the US, being a citizen might offer some protection. You also might find it a bit more difficult to manage US financial accounts like 401ks if you are a non-citizen.

Renouncing will not change your ability to visit the US on your UK passport.

The benefits are mostly having a more convenient and simpler financial life. Probably no US taxes to file, but your UK taxes will remain complicated as you'll probably have US income from SS, 401ks etc. You'll get the benefits of ISAs and be able to invest in UK based investment funds.

If you do some planning you can remove a lot of complications and make your US taxes very simple, so it's not an easy decision. I'm in a very similar situation to you and if I move back to the UK I'll probably keep the US passport.

Michael

The ~$100K foreign earned income exclusion is a simple way of filing US tax returns for people making less than ~$100 of earned income. For people making more than ~$100K, foreign tax credits or a combination of the ~$100 foreign earned income exclusion plus foreign tax credits can be used to offset US taxes owed.

RICH

Isn't the filing price to renounce pretty high now? I think it went up recently.

scrubbedexpat099

If he has no intention of coming back is there a need to do anything?

I would give it a trial period before doing anything.

penguinsix

While, on paper, you shouldn't have any problem re-entering the USA, I have spoken to some people who have been queried rather hard "why did you give up your citizenship? What's wrong with America? If you don't like it here why are you visiting?"

Depends on the officer at the point of entry and what sort of mood he is in.

Guindalf

I seem to remember that it shot up to around $2300.

markonline1

That's all it will be to me when I go through the process next year. As my daughter has been born over here, it'll be an insurance policy should things go pear shaped with the wife and I find myself going back to England for some reason. Sure I'll stand there and tell them America is the greatest country in the known universe or whatever it is you have to do, but I'll be singing Land Of Hope And Glory at the top of my voice in my head whilst I do LOL.

RICH

I came to US to be with my US love interest. Having embarked on the journey, the marriage went pear shaped, but I decided to see the process through to citizenship. My main reasoning was having the option of living in either country later in life. The potential financial and red tape issues, even if I become wealthy, are out weighed by the fairly unique opportunity for dual citizenship.

sir_eccles

When I went through the citizenship process I also thought of it as a paperwork exercise. That said, when I was there standing up during the ceremony I actually found it quite emotional and moving. May have been a manly tear in my eye or a speck of dust or something.

Hotscot

Bob Hope?