To Consider Giving up US Citizenship?

[NotFunBeingAnAmericanInLondon]

Posting here for traffic.

Desperate to talk to other US citizens settled in Britain who doubt they will be returning to the US for personal reasons.

Am I the only one who's been here so long I didn't notice the FBAR thing? I don't file FATCAs, but I am never sure. What are we supposed to do if our British born, dual US citizen kids have CTFs? I have a SIPP with mutual funds in it, my accountants tell me not to even bother mentioning it now?! Apparently this is a time bomb for later.

Social Security and State Pension are supposed to be reciprocal, but I cannot get any information from anyone.

I used to file my own 1040 forms, but now that there are so many forms to file with the threat of prison if I mess up that I am truly cowed and pay someone else £400 a year to file for me. And I am a housewife with no income!

The state department has just raised the cost of expatriation from $450 to $2500 which worries me even more.

I wonder, should I just give up my citizenship now and make life much easier?It's a lot of worry and stress to carry around for emotional/nostaligic reasons.

Our DD is a dual U.S citizen. I'm not sure what the tax implications will be for her once she starts working.

talkin I can't see how they'd owe you money if you've never paid tax there? They can only owe you refunds surely and if you've never paid anything then there can be no refund... What am I missing?

So, it seems from this thread that the big "danger" areas in terms of being liable for US tax are 1) CGT on sale of house (not taxed here but would be taxed in the us?) 2) ISA income, esp stocks and shares ISAs and 3) pension contributions/assets. Is that right? Any I am missing?

mimi speaking for myself, I'd be advising her to renounce her US citizenship as soon as she's 18 or 21 - before she starts doing pension contributions anyway (as all employees in the uk will have to after 2016). Unless there's a big chance she'd want to live there at some point.

talkin I can't see how they'd owe you money if you've never paid tax there? They can only owe you refunds surely and if you've never paid anything then there can be no refund... What am I missing?

I obviously don't know talkin's situation but I got a refund for the grand total of $3.67 last year. God knows why since I didn't owe anything and just put down my self employed income plus a bit of bank interest.

Sent as a dollar cheque too- am tempted to deposit it into my Citibank dollar account!

Ooh $3.67 well that's worth all the shit they put you through then isn't it Taz?

minipie
there is a dual taxation agreement
if you have been over taxed by the other country the IRS has to refund you - as a US citizen .....

trust me I'll go through the allowable deductions to make them wish they had never asked for the form.

hmm...interesting...

Can we have a support group to hind each other's hands through thus issue? I don't know who to turn to. I want to renounce and be done with it all. But I'd love having some support in the process. It's still a bit scary.

I just wanted to give you all an update. I renounced my US Citizenship this Spring. The U.S. Consular officers were very kind and professional. I was there with three other women, all in the same situation. We were a little support group, lol. One woman was a chartered US accountant and felt she couldn't cope!

I asked, if I would be put on a watch list. The officer said he wasn't aware of any, and that I should be able to travel to the U.S. as easily as any other British Citizen. He said there were a lot of "urban myths," about the situation.

I can report that you don't have to justify your choice and it doesn't matter if taxes are your reason.

The paperwork takes months to get back to you. I am still waiting. They are pretty backed up with requests. It is all sent back to Washington where it is done centrally.

Given the high cost of this, I decided to file my own 1040 and Fbars this year to claw back some costs. I'll have to do the same again next year for the first few months of this year that I was still a U.S. Citizen.

I'll also need to file a 8854. I'll do that myself as well. It looks confusing, but I don't want to pay an accountant £1,500+ to do it for me. I think I'll be fine because: 1. I don't owe anything outstanding, 2. Sadly, my net worth is less than USD 2M, 3. The accounts that I've spoken to all contradict each other, so I'm not sure they are worth the money, 4. If I do it wrong/make a mistake, I expect the IRS will send it back to me pointing out the error and asking for further/improved information, which I'll gladly respond to.

Final issue: emotion, sentiment, identity. What am I now? I guess I am an American without a passport.

Hope this helps some one else.

Hi, just read this as we are British but DS was born in the US as we are temporarily living here. Glad you got everything sorted. Wanted to agree re the crazy view that 'everyone wants a US passport'. Not in our experience. Of our expat friends, anyone from Northern Europe/Scandinavia who has had children here is very keen for them to rescind the US nationality awarded at birth when they're old enough to do so. The old view that a US passport is the key to the American Dream kind of life is long gone. It's only a dream world if you're coming from a country that's significantly worse off. For many Europeans, that's usually not the case.

Yes Wibbly, I would agree that the USA doesn't have the clout and prestige that it used to have. But that wasn't really my motivation. My choice was purely practical based on my own family situation.

Congratulations OP! I'm an accidental American (and finally tax compliant) but hanging on to my citizenship for the time being as there is a slight chance DH's job will move us there in a few years and I can't quite trust that me renouncing won't affect his/our visa chances.

Glad it went well for you. DH and I are working poor, no assets so unless he wins the lottery (which we don't play, LOL), we will never earn enough to have to pay tax in the US.

Hi Notfun, thanks for the update. My husband is a dual citizen (US/EU) who has never lived in the US. We've just discovered this problem and are catching up with tax compliance. It is expensive using an accountant but we really don't know what we are doing in terms of filling out forms for the IRS so it works for us. Then I imagine he'll renounce as we don't plan to live in the US in the future. This issue has implications for his wider family too as they are all accidental Americans. We will be so glad when this phase of dealing with this issue is over. Good luck to all the others on this thread.

That's great, glad it went smoothly. I just filed my last FBARs ever for the first few months of 2014!

I have found out that my mother's financial people messed up a bit of her estate taxes and I'm actually owed a nice sum from the IRS so I need to work out how to reclaim it, but once that is done am IRS free!

We don't owe any tax either expat. They seem to have allowances for the fact that we pay tax in the UK.

Can I clarify something please. If you were born in the USA, but have lived here in UK since the age of 10 (and have permanent residency of UK stamp in passport) - and no social security number in USA - do you still have to file a tax return in USA despite paying all UK taxes?

time my understanding is that you don't even need to hold a US passport - if you are entitled to a US passport (through having an American parent for instance) then you must make US tax returns each year and also bank account statements called FBARs.

okay - thanks

or if you were born in America (like Boris Johnson) but now live in the Uk then you must make yearly tax returns to the IRS. I suppose the tax return obligation starts at 18 but I'm not sure.

Time, NCAD is right in afraid.

I don't earn any money and we aren't "high net worth individuals." The problems that forced me to act were primarily:

1. A non US Citizen (my DH) can only inherit Usd 60,000 tax free from a U.S. citizen (me), after that it would be taxed at 40%. I'm not planning to die soon, but if I did our family would have been financially ruined. And ultimately, death is inevitable for us all!
2. We live inLondon where house prices are rising, USCitizens must pay capital gains on the increase in value of their home when they go to sell it. I half own our home. I think the threshold was used 200,000, but I don't remember exactly. Again, a very unfair burden on my family based here in the UK.

Notfun I could be wrong here but that $60,000 threshold is for US based assets as far as I'm aware. If your assets are UK based then I think a different (possibly higher) threshold applies.

Our concern was home ownership - as a non resident alien spouse I have far fewer rights. The mortgage of our UK jointly owned home comes out of my US/EU husband's account so in US tax terms it is being viewed as his house unless he 'gifts' me half of it thus using up our gift allowance. I find this astonishing as under UK law I'm the joint owner. Oh well, what can you do?

Apparently a lot of people ar e doing this. Especially expats

Seriously freaked out by this post now. My DH is an American but our kids haven't been registered at the US embassy here yet - and we may not bother, as we want them to decide when they are old enough. We're planning on taking them on British passports as British citizens this summer (I am British, and DH is both US and British, but only has a US passport).
We have never heard of any of the paperwork you mention OP. We pay taxes and file here. My DH has been here for 25 years, so to all intents and purposes, he forgets his US citizenship. He doesn't vote by post, has no assets there, no bank accounts. He's British in every practical way, but still an American at heart when it comes to his culture and sports preferences. Our income isn't high either.
Are we sticking our heads in the sand here?