Should you retire overseas

[nun]

I have some friends who are seriously considering leaving and renouncing their US citizenship. Apparently it is not very difficult for us little guys, but that is not for us.

Renouncing US citizenship is quite difficult. First you need to get another citizenship as the US won't let you go without it. Then you need to file the required expatriation forms with IRS and the State Dept and pay the $2.5k fee.

For people that are already dual citizens it isn't so difficult, but if I was to move back to the UK I would not renounce my US citizenship as with a little planning it doesn't pose much of a difficulty.....even with FBAR and FATCA regulations.

 

[Ed_The_Gypsy]

Now that you mention it, nun, my friend's wife has dual citizenship. Sorry if I mislead anyone. Renunciation is not on my program so it is not something I worry about.

IIRC, it is easier for little guys to renounce than the high-rollers though.

 

[Alan]

IIRC, it is easier for little guys to renounce than the high-rollers though.

The London Mayor said he was going to renounce his US citizenship a number of years back when he was stopped from boarding a plane with his wife and children on his UK passport going to Mexico as the flight went through Houston.

It is only this year that he has finally agreed a money settlement with the IRS (undisclosed) and is now up to date with his taxes.

 

[eta2020]

The default position on SS is 30% taxation to non-resident aliens, but if you are living in country with a tax treaty with the US then the SS will almost certainly be taxable only in your country of residence. Certainly the UK has a DTA with the USA and SS is taxed only in the UK.

FWIW, when we return to live in the UK we will not be renouncing our US citizenship, we will keep all our US investments in the US and will file taxes in both countries.


International Programs - Nonresident Alien Tax Withholding

Sure...what I am getting at is that you will not avoid taxes even if you give up US Citizenship. That includes taxes on SS.

US Citizenship is funny thing. Some people would kill get it and some would kill to get rid of it.

 

[Alan]

Sure...what I am getting at is that you will not avoid taxes even if you give up US Citizenship. That includes taxes on SS.

US Citizenship is funny thing. Some people would kill get it and some would kill to get rid of it.

Absolutely. Giving up US citizenship simply gets you out of filing a US tax return, applying all taxes you have paid in your country of residence to the taxes owed to the US and hoping that you get it all correct meaning you only pay the higher of the 2 country's taxes, and no more.