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Old 06-08-2020, 01:05 AM   #321
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As someone who has gone through that process recently, I can say that it can get complicated in a hurry.
Like to share the details?
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Old 06-08-2020, 01:41 AM   #322
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Yeah so this isn't the same as the US. US is citizenship-based not territorial so if you are a US citizen, no matter where you live, you are taxed on your worldwide income. (after the first $100k exclusion)
If you read what you quoted you will have seen I clearly said I was only referring to foreign nationals living in the US, nothing about US citizens.

As I also pointed out in another post, for a USC living abroad the first $100k of earned income is excluded. For a USC looking to retire abroad all income including all pensions is taxed by the US, an exception being US SS which is only taxed in the UK. The SS exception may or may not apply to other countries depending on the DTA between those countries. UK SS is fully taxed by the US for a USC living in the UK.
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Old 06-08-2020, 03:22 AM   #323
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Like to share the details?
I'm not gonna go into specifics. My situation was rather well suited for an expatriation situation. On the day I officially expatriated, I only had 2 kinds of assets: cash (in bank accounts) and my primary residence (which I had just purchased abroad). So the process was rather straight forward for me, even though I fell in the "covered expatriate" category. But adding retirement accounts, pensions, and annuities to the mix would have complicated things a lot more. For a bit of fun, take a look at IRS form 8854.

ETA:
Before expatriation, my only retirement account was a Roth IRA. I had converted my 401K and traditional IRA to the Roth some years prior. In addition, I had been retired for some time and I was harvesting LTCGs to take full advantage of the 0% bracket each year, so I wasn't sitting on large CGs. Overall, it didn't cost me much to convert everything to cash.
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Old 06-08-2020, 09:04 AM   #324
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If you read what you quoted you will have seen I clearly said I was only referring to foreign nationals living in the US, nothing about US citizens.
Sorry, I got ya now!
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Old 11-22-2020, 03:20 PM   #325
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That sucks that you can’t invest in US ETF’s, because the US also doesn’t allow their citizens to invest in non-US ETF’s without treating them as PFIC’s. If the UK takes the same approach as the EU towards US ETF’s I’m going to have a lot of thinking to do on investing. (I had converted our MF’s to ETF’s before moving back as the UK recognizes US ETF’s to be the same as UK ETF’s).
When I was working in Baku, Vanguard wouldn't let me do something (sorry, I forgot what). I discovered that if I declared myself to be retired (but I wasn't) they allowed me. This was about 5 years ago.
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Old 11-22-2020, 04:17 PM   #326
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UK SS is fully taxed by the US for a USC living in the UK.
I am wrong about this. I just got confirmation that UK SS is taxed only in the UK and does not even need to be listed on the US tax return. US SS is reported to the IRS on a SSA-1099 so on the US return it has to reported and then reversed in other income with the Tax Treaty referenced. (I start UK SS in February so was making inquiries)

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When I was working in Baku, Vanguard wouldn't let me do something (sorry, I forgot what). I discovered that if I declared myself to be retired (but I wasn't) they allowed me. This was about 5 years ago.
I have only ever been retired while living overseas so can’t think of what the difference might be if you are working, but my son is living and working here and has his IRA and Roth IRA with Vanguard. He has been doing IRA to Roth conversions but not much else.
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Old 02-25-2021, 12:12 AM   #327
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In the context of this thread: expat visas etc., FATCA is of secondary interest but if anyone cares to know, US is the world largest tax haven for non-US citizens - kind of funny... but also another reason to consider renouncing the citizenship; you move abroad as non-citizen but leave your money in US and you're perfectly sheltered from anyone knowing anything about your finances.

"...while the Internal Revenue Service (IRS) receives information about U.S. persons’ financial accounts in foreign financial institutions (FFIs), U.S. financial institutions (U.S. FIs) report little or no information about foreigners holding financial accounts in the United States."

https://michiganlawreview.org/should...s-adopt-crs-2/
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Old 02-25-2021, 03:43 AM   #328
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In the context of this thread: expat visas etc., FATCA is of secondary interest but if anyone cares to know, US is the world largest tax haven for non-US citizens - kind of funny... but also another reason to consider renouncing the citizenship; you move abroad as non-citizen but leave your money in US and you're perfectly sheltered from anyone knowing anything about your finances.

"...while the Internal Revenue Service (IRS) receives information about U.S. persons’ financial accounts in foreign financial institutions (FFIs), U.S. financial institutions (U.S. FIs) report little or no information about foreigners holding financial accounts in the United States."

https://michiganlawreview.org/should...s-adopt-crs-2/
There are a few issues to US citizens renouncing their citizenship , not that I would consider doing that. First one is that in most cases once you renounce your US citizenship it is irrevocable. Second issue is that would you be able to keep your US based investing accounts ? Already most US based banks and some private based firms are not happy to deal with expats . So I think one would have to think very carefully before renouncing US citizenship.

How are foreigners able to open US based accounts when I have heard it is so hard to do once you are an expat ? Yes, I know having a US based address helps in some cases for expats, but how can foreigners do it without SS number ? Maybe money talks based on the amount for those foreigners, not that I am suggesting anything.
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Old 02-25-2021, 09:54 AM   #329
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Originally Posted by tenant13 View Post
In the context of this thread: expat visas etc., FATCA is of secondary interest but if anyone cares to know, US is the world largest tax haven for non-US citizens - kind of funny... but also another reason to consider renouncing the citizenship; you move abroad as non-citizen but leave your money in US and you're perfectly sheltered from anyone knowing anything about your finances.

"...while the Internal Revenue Service (IRS) receives information about U.S. persons’ financial accounts in foreign financial institutions (FFIs), U.S. financial institutions (U.S. FIs) report little or no information about foreigners holding financial accounts in the United States."

https://michiganlawreview.org/should...s-adopt-crs-2/
The article is dated 2019, any update since then or things are hold until Covid issues are sorted out.
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Old 02-25-2021, 10:31 AM   #330
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I am late to this thread and haven't read all the prior posts.

I've been researching Portugal since we are interested in potentially retiring there. What I have learned is the following:

1) they grant Non-Habitual Residence status to new expats for the first 10 years. The tax rate is 10% (changed last year). After that you pay like a local.

2) There's a US-portugal tax treaty which spells out the details. Essentially US govt pension (I think fed, state, and local pension) are not taxed in Portugal but are in the US. Other passive income (SS, company pensions, dividends, etc) is taxed in Portugal and then in the US (taxes already paid becomes a credit). Some say US first and Portugal second so it's still a bit confusing but the amount you pay would be the higher of the 2 anyway.

3) Portugal-based income (local employment) is subject to normal Portugal tax rates, which is up to 48% depending on the tax bracket.

4) Capital gains on real estate is only taxed where the real estate is located. So if you qualify for the capital gains exemption on your primary residence in the US, it will not be taxed in Portugal.

5) One big surprise is that there is no tax break fo Roth-IRA. They consider all withdrawal as income even though it's funded with after-tax money. There is no such thing in Portugal so there is nothing in the system to exempt it.

For me the lack of Roth exemption and the limit of 10 years for the NHR are pretty big issues. Maybe I will move there for 10 years and then move back. We'll have to see as time goes how things change.
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Old 02-25-2021, 11:09 AM   #331
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I am late to this thread and haven't read all the prior posts.

I've been researching Portugal since we are interested in potentially retiring there. What I have learned is the following:

1) they grant Non-Habitual Residence status to new expats for the first 10 years. The tax rate is 10% (changed last year). After that you pay like a local.

2) There's a US-portugal tax treaty which spells out the details. Essentially US govt pension (I think fed, state, and local pension) are not taxed in Portugal but are in the US. Other passive income (SS, company pensions, dividends, etc) is taxed in Portugal and then in the US (taxes already paid becomes a credit). Some say US first and Portugal second so it's still a bit confusing but the amount you pay would be the higher of the 2 anyway.

3) Portugal-based income (local employment) is subject to normal Portugal tax rates, which is up to 48% depending on the tax bracket.

4) Capital gains on real estate is only taxed where the real estate is located. So if you qualify for the capital gains exemption on your primary residence in the US, it will not be taxed in Portugal.

5) One big surprise is that there is no tax break fo Roth-IRA. They consider all withdrawal as income even though it's funded with after-tax money. There is no such thing in Portugal so there is nothing in the system to exempt it.

For me the lack of Roth exemption and the limit of 10 years for the NHR are pretty big issues. Maybe I will move there for 10 years and then move back. We'll have to see as time goes how things change.
That is a bummer about the Roth. In the UK-US tax treaty, in the section on pensions, it states that if withdrawals from a pension plan are tax free in the US then they will be tax free in the UK.
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Old 03-27-2021, 04:39 AM   #332
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Old 03-27-2021, 04:41 AM   #333
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Any Canadians move tax residency to Turks and Caicos?
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Old 04-03-2021, 10:15 AM   #334
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Old 04-04-2021, 02:36 PM   #335
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New article on top places in Europe for retirement.

Doesn't really delve too much into details.

https://www.travelandleisure.com/tri...tire-in-europe

Mentions taxes but not in any depth. Would be useful to have some links, including the supposed cheap private health insurance.

Portugal exempts you for 10 years from local taxes? What is to keep you from living up to 10 years and then moving on?
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Old 04-04-2021, 02:49 PM   #336
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That's actually much better than most similar articles I've seen.

Fortunately, we have members here at E-R.org who live in several of those places, so questions can usually be answered here, and the search function also works quite well.
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Old 04-04-2021, 02:56 PM   #337
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Portugal exempts you for 10 years from local taxes? What is to keep you from living up to 10 years and then moving on?
Portugal caps taxes on foreign sourced income (American Social Security fo example) to 10% for the first 10 years thru the NHR program. It used to be completely tax exempt but they changed it in 2020. Certain US government pensions (not SS) is not subject to taxation in Portugal but you'll pay US taxes on it similar to 10% anyway. If you work locally, then it's taxed at the normal local rate.

After 10 years there's nothing preventing you from moving away. Since portugal doesn't tax worldwide income, when Portuguese people are earning money overseas, they also don't pay taxes to Portugal.
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Old 04-04-2021, 03:08 PM   #338
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What about people who don’t move their assets to Portugal? They’d be earning dividends on their Us accounts, even have SOcial Security directly deposited to Us bank accounts, never opening up local bank accounts.

Maybe get one or two local credit cards for conveniences throughout Europe.
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Old 04-04-2021, 03:32 PM   #339
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From the Portugal-US tax treaty, article 20, it looks like SS will only be taxed in the USA if the person is a resident of Portugal. This is the exact opposite of the US-UK treaty.

https://www.irs.gov/businesses/inter...eaty-documents

It also looks like US based investments paying dividends are taxable in Portugal if the US recipient lives in Portugal. (Section 10).

Before moving to any country plenty of research should be done around taxation.

As a US citizen you are always taxed on worldwide income no matter where you live and if a treaty says a stream of US income is taxable in the other country then you still have to pay tax on it and then claim FTCs to reduce the US taxes.
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Old 04-04-2021, 03:51 PM   #340
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When would the tax liability be triggered?

As soon as you apply for and get any visa that lets you stay beyond 90 consecutive days?

Or if you obtain a retirement visa, which sounds like it’s in a different category?

Or after you get a number of 1-year visas?

I heard in some countries you have to renew 1 year visas a couple of times before being eligible to apply for 5-year and longer visas and eventually citizenship if you want it.

Or do retirement visas avoid this laddering scheme?
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