According to the Federal Register the number of American citizens who are renouncing their citizenship continues to rise year on year. Comparing the second quarter of this year to last year the number has gone from 189 to 1131 cases of passports being surrendered.
Whilst these numbers pale in comparison to the 6 millions who are thought to live abroad the continual rise in renunciations given the fact that it isn’t a task taken lightly is impressive.
In July 2014 the Foreign Account Tax Compliance Act (Fatca) comes into effect, this has on the one hand been a major hassle for financial institutions around the world who have American clients but it’s also causing headaches for American expatriates.
Though the US Treasury department is adamant that nothing is really changing (American citizens are taxed on worldwide income) the reality is that it’s getting more expensive for American expats as filing tax returns gets more complicated even for those with seemingly simple affairs.
The other thorn in the ointment for American living abroad is that due to the increased reporting levels required by Fatca for foreign financial institutions that have American clients many are finding that they’ve had their accounts closed and been asked to move elsewhere. In some countries this is starting to make it difficult for American expats to hold a local bank account in the country they’re living in.
Those contemplating renouncing their citizenship still need to sort out any prior tax obligations before their renunciation can happen.
Read the full article: http://www.bbc.co.uk/news/magazine-24135021
