Experiences of dual citizen US DC renouncing citizenship at 18

[TheCryingTheBitchAndTheFloordrobe]

Sorry, this is a bit of a niche one and I'm not exactly sure where to put it.

My DC have citizenship of the US and UK. We live outside the US and at present they only hold UK passports (they've had US passports previously).

The oldest DC will be 18 in a few months and is trying to decide between just renewing his US passport and sucking up the tax hassles or revoking his US citizenship. Friends who've revoked have said it's an onerous process and very expensive.

Wondering if anyone else has been in the same position and what you decided in the end.

My cousin's family was in the same situation. The children acquired US citizenship because they were born in the US while my cousin was working there for a few years when the children were born (she is British, as is her husband). The children are young adults now and have both given up their citizenship due to the tax hassles. My cousin never said anything about is being unduly complicated, but I'm not sure.

I remeber her saying though that once you renounce citizenship it is absolutely impossible to reaquire it under any circumstances? Is there any possiblility he may want to live and work in the US in the future?

Where were they born ?
Do they have Social Security Numbers ?

Despite what much of the media will tell you, the US system checks are dire.

Revoking as an adult is a grade A pain in the arse requiring accountants and lawyers.

giving up dual at 18 is not the same process.

My two DC were just talking about this tonight. They were born in the UK, and it seems that we’ve saddled them with a headache.

I think it's extremely foolish to renounce at 18. You have no idea where life will take you! He might find a dream job in the US or fall in love with an American, his children may want to be able to work or live in the US.

I don't know why people always bang on about the tax hassles, unless you are making more than like 150K/year or have proper assets it's a fairly basic form you submit online once a year.

I would advise him to wait until he's more settled in life.

If born in the UK and never worked in the USA
letting the passport lapse does the trick.

The US systems will never spot them - even if they go on holiday to the US on their UK passports (with a UK place of birth and a UK accent)

I was born in the US so have taken the decision to never get rid of mine
but I've never filed a US tax return either
(I have the numbers, IRS will owe me money if they ever notice)
and have been there many times and am registered to vote.

The US systems are much more half arsed than the UK ones

A friend of mine had to renounce his when he bought a flat with an ex in his 20s, and the relationship ended in flames a few months later. The US wanted him to pay capital gains tax on the sale gain (which wasn't much), but as the UK didn't have capital gains tax on primary residence, it was fully taxable in the US under their worldwide income taxation scheme. Something to keep in mind for later. I wouldn't act on it now.

They were born outside the US and do not have SSNs but I was told last time I renewed their passports that they wouldn’t renew them again without me getting SSNs for them.

Yes this is why I’m dithering about advising them a bit. We live close to the US so it wouldn’t shock me if one of them wanted to work there one day, but it’s really hard to know for sure at 18!

They cannot go on holiday to the US as they don’t have US passports and the US and UK are aware that they have citizenship somehow. They can’t get an ESTA or other visa to enter the US as legally they have to enter on their US passports.

The taxes are super easy to do in general. The only time it might be problematic is if your 18 year old suddenly becomes a really high earner. I have dual and my kids have dual, I’ve filled it out each year. Right now I actually get a tax credit per kid (around £1300 per year) that I’ve used to put toward their university education.

When you say you live close to the US, do you mean Canada? I’m Canadian-American and my kids are Canadian-British-American so have been doing this a while now.

Its proud to be a citizen.

Thanks this is really helpful. All I’ve ever heard is that it’s a nuisance so it’s very handy to know it’s actually not that bad. Do you file your own, or get an accountant?

How have you worked yours out? Or are none of your DC 18 yet? What do you think you’ll do about it eventually?

They cannot go on holiday to the US as they don’t have US passports and the US and UK are aware that they have citizenship somehow.

Really ?
Have they actually tried ?
Just that I know people who let their passports lapse who have had no problem at all getting an ESTA and having a holiday in the USA

The taxes are easy. Unless you live in a tax haven or have very complicated finances, you won't owe. And frankly they don't check; I back filed a few years when I went to sponsor my DH for a green card and IRS didn't blink as I had not owed anything, just not told them. They only really care about high earners. UK taxpayers won't owe if their income is wage based as US credits UK tax paid over the foreign income exception. Same for Canada, if that is the country. I was able to do it all myself but I never had anything other than straightforward wage based income.

Renunciation isn't free and the US makes it a hassle. If they are not 100% sure they will never live in the USA, don't do it.

I would hold off on it.

The taxes are easy to file - all the forms are available online and there are instructions online too. It takes a while to do only because most of the rules are rabbit holes, but anyone who can read English, add, subtract, multiply, divide, and is of average intelligence can do it. There is a high threshold for tax liability - far higher than the average British income iirc. If your DCs own investments or sell property, an accountant would be a good idea. People who are in that position in the US would generally have an accountant do their taxes for them too in those circumstances.

This had never occurred to me. My eldest is in his mid 30s and has US/UK citizenship. He has a long expired US passport and an SS number. He's disabled and on benefits here, he'll never be able to work. I assume it's all irrelevant for him.

I certainly wouldn't do anything rash, advise him to do nothing at all yet, as I agree with bohemian that it's an honour a gift, that most don't own, so consider it carefully.

Yep, they have tried. They can’t get an ESTA. Last time I renewed their UK passports I didn’t declare their US passports as they’d expired and the UK passport office rang me to ask why I hadn’t mentioned them. They were fine with it once I explained but I had to send pics of the expired passports.

I think technically he’s still supposed to file every year, but in reality if he never has I doubt anyone will pick up on it?

Well he has to do something- either renew, get an SSN and start filing or renounce. Not being able to go to the US is a complete pita and he’s definitely not interested in getting on the wrong side of the IRS.

But judging by the helpful advice of posters here the filing doesn’t sound too nightmarish so he’ll probably go that route.

He's not required to file unless he has documented earned income, income from interest, income from investments, or capital gains.

He's welcome to file with an income of zero, but iirc, none of my DCs, living in the US, filed a return until they had a W-2 to go with one.

Of the US - unlikely in the present climate