Saverin expatriation.
 

One sure fire way to annoy Americans is to relinquish US citizenship. I believe that Saverin will be paying the expatriation tax and will continue to pay any US tax due, but that gets lost in the volume of the outrage. Saverin will also find it much easier to invest his money outside the US as a non-US citizen. I have also considered expatriation, not to avoid paying US tax, but to make my taxes less complicated and to make my financial life easier in the UK.

http://www.nydailynews.com/news/mone...icle-1.1079936

Re: Saverin expatriation.
 

I love that our esteemed Senator Schumer has proposed a law to punish the filthy tax-dodger that, er, already exists. Not that that sort of thing has ever discouraged Chuck in the past.

Re: Saverin expatriation.
 

Do wonder in days past, why folks would try to get to the US to reduce their tax bill...

Re: Saverin expatriation.
 

There is already a 30% tax on income, gains etc paid to NRAs, but US tax treaties usually modify that, so the Schumer law is undermining US treaty obligations.

The thing is it would only come into force if you are expatriating for "tax reasons". So if you go ahead, expatriate and end up paying the greater 30% tax surely that shows that you did not expatriate for tax reasons.........also the greater 30% tax rate will reduce the capital gains that you'll have to pay in your country of residence as you'll have a greater FTC.

Re: Saverin expatriation.
 

I think this is the perfect riposte to the ever-increasing burden imposed by the IRS by FATCA etc on people who have no intention of trying to avoid their US tax obligations. The outrage is both predictable and hilarious.

Re: Saverin expatriation.
 

I think it is more to do with the shock horror that somebody would not want to be a USC.

Re: Saverin expatriation.
 

Why? The overwhelming majority of people in the world do not want to be USC's either.

Re: Saverin expatriation.
 

I think most USC's assume otherwise.

Re: Saverin expatriation.
 

Agreed. It's American Exceptionalism and the "shining city on the hill" thing. If you ever challenge those two holy grails Americans become very defensive and then very aggressive. Its not particular to Americans, if you gave up your UK citizenship some in the UK would react in a similar way, but probably not to the same extent.......it's a hyper sensitive subject for the Americans.

Re: Saverin expatriation.
 

It's a similar reaction one sees when the US flag is mistreated in anyway. There are certain people (more than you would normally expect it seems) that take the flag code very seriously.

Re: Saverin expatriation.
 

This forum is filled with people, not from the USA, who feel otherwise. A US Passport still is - and will be for the foreseeable future - the most valuable document you can possess in the world. Period.

Re: Saverin expatriation.
 

The $680.00 (or whatever it is now) is more than it is worth to me right now. Full stop.

I think Boiler is right, it is perceived as an insult to America, more important to some than lost tax.

Re: Saverin expatriation.
 

I fully support Saverin's right to take his money elsewhere - American should not be turned into a financial prison. So I suppose I understand both sides of the coin.

Re: Saverin expatriation.
 

Go on then, I'll bite. What advantages does a US passport have over other, lesser, ones?

Re: Saverin expatriation.
 

You are spared the temptation of going to Cuba on vacation?

Re: Saverin expatriation.
 

You have the privilege of getting taxed by the US on your worldwide income regardless of whether you're a resident of the US?

Re: Saverin expatriation.
 

I no longer have to give USCIS any more money ...

Re: Saverin expatriation.
 

Why don't you ask that question of those on this forum who are looking for one?

Re: Saverin expatriation.
 

If you are killed in a US drone strike while abroad, the US government will have to come up with a lame justification, if you are a citizen. Whereas if you are not a citizen, they can ignore it completely?

Re: Saverin expatriation.
 

Why would you want to limit yourself to that subset?

Re: Saverin expatriation.
 

Can you inform us of who they are?
Not being funny, but off the top of my head I do not remember anyone with the purpose of getting a US passport, I am sure there are examples you can point us to, but most people do the citizenship thing as just the next step and was not an end in itself.

Re: Saverin expatriation.
 

I have both US and UK passports.

The US passport is great if you want to live and work in the US, but it is a big disadvantage if you live abroad because of the tax burden and the difficulty of foreign investing as a US citizen. There are still many people who covert US citizenship as they see it as a route to greater freedom and prosperity, but the same could be said of the people coming to the UK, Germany, Australia, Canada etc.

The UK passport is good to have as it lets you live and work in the EU and it does not have the same expatriate tax issues as a US passport.

I would only advise someone to take US citizenship if they intended to live in the US for the rest of their life. If there is any chance that they will live outside the US again I would tell them to avoid US citizenship like the plague.

I intend to retire to the UK and I have spent countless hours researching the associated tax and money issues/problems.

Re: Saverin expatriation.
 

I don't mean to be rude nun. But if you want to avoid the over-arching financial implications and are intending to retire to the UK anyway, surely you could do what this Saverin guy has done and just ditch the US citizenship?

Re: Saverin expatriation.
 

Yes I could. But I have many years of SS payments and my retirement money is all in US based funds and keeping US citizenship is a way to protect myself against the sort of stuff that Schumer is proposing. As an NRA with money in the US you leave yourself at the mercy of some pretty veinal politicians. The way the legislation is right now my life would be simpler if I were to give up US-citizenship after I moved back to the UK because as only a UK citizen resident in the UK my US SS and income from US based retirement accounts wouldn't be US taxable. My taxes would probably not be much different because of the tax rates in the UK, but the paperwork burden would be a lot less. But I'll probably deal with the paperwork and the inconvenience as being a US expat abroad is probably safer than being an ex US citizen NRA with money in the US. Honestly I'd rather that I'd just stayed with the Greencard and never taken US citizenship now that I am planning to live in the UK,

Re: Saverin expatriation.
 

Another factor for those of us with family in the US is if there is a risk of legislation being passed that would bar renouncers from subsequently entering the US.

Re: Saverin expatriation.
 

This is interesting. I thought being a Green Card holder meant you had the same fiscal responsibilities as a USC and the so called exit tax applied as well. Please can you explain the benefits of just keeping the Green Card over becoming a USC.

Re: Saverin expatriation.
 

You are right. You must fill out the same 8854 expatriation and potentially pay the same expatriation tax whether you are giving up US citizenship or LPR. In the latter case you obviously don't have to go through the renouncing stuff at a US consulate and the Schumer legislation seems to be aimed at ex-US citizens rather than ex Greencard holders. If this goes any further it will be interesting to see how LPRs who choose to leave the US are treated.

The more I think of this the more I see the US reaction to expatriations as analogous to the way East Germany stopped their citizens from leaving the country: East Germany used a physical wall, the US uses tax law.

Re: Saverin expatriation.
 

Precisely!

Re: Saverin expatriation.
 

I'm a bit confused about something in this Saverin case. I was under the impression that tax law already imposes a 30% tax on capital gains connected with US based businesses paid to NRAs unless that is reduced by some tax treaty. I don't think the US has a tax treaty with Singapore so how is Saverin so much better off from a tax situation? He had to mark-to-market the gain on his Facebook shares when the expatriated and pay 15% CGT and won't he now have to pay 30% on any additional gains? or does he just have to pay the gains on the price as of his expatriation date? If so that's a massive loophole. Of course if Facebook shares go down below the mark to market price I assume he'd be worse off form a tax perspective.

Re: Saverin expatriation.
 

I understand that Saverin has already stated he will pay his full US tax obligations, and did so some days ago...

Re: Saverin expatriation.
 

Sure the Facebook share price was probably estimated below $38 when he paid 15% CGT at expatriation, but what happens if he now sells his shares at a higher price. I'd have though he'd pay 30% on the difference as Facebook is a US firm and he's an NRA resident in Singapore.

Re: Saverin expatriation.
 

At $31/share Saverin may well have paid more tax at expatriation than he would if he sold now. However, in his situation expatriation is probably worth it however low the FB share price goes as it removes a lot of IRS restrictions and paperwork.