PDA

View Full Version : Americans permanently overseas......


OFSO
27th Sep 2013, 20:49
....nota bene.

The number of Americans giving up their citizenship has rocketed this year - partly, it's thought, because of a new tax law that is frustrating many expats.Goodbye, US passport.

That's not a concept that Americans contemplate lightly. But it's one that many of them seem to be considering - and acting on.

The number of expatriates renouncing their US citizenship surged in the second quarter of 2013, compared with the same period the year before - 1,131 cases to 189 in 2012. It's still a small proportion of the estimated six million Americans abroad, but it's a significant rise.

The list is compiled by the Federal Register (https://www.federalregister.gov/articles/2013/08/09/2013-19224/quarterly-publication-of-individuals-who-have-chosen-to-expatriate-as-required-by-section-6039g) and while no reasons are given, the big looming factor seems to be tax.

A new law called the Foreign Accounts Tax Compliance Act (Fatca) will, from 1 July next year, require all financial institutions around the world to report directly to the US Internal Revenue Service (IRS) all the assets and incomes of any US citizens with $50,000 (£31,000) on their books. The US could withhold 30% of dividends and interest payments due to the banks that don't comply.

It's an attempt by the US authorities to recover an estimated $100bn a year in unpaid taxes on US citizens' assets overseas. Unlike other countries, Americans are taxed not only as residents of the US but also as citizens, wherever they live.

Suddenly, some expats are waking up in a cold sweat. They have always had to file tax returns and disclose foreign accounts on a form called the FBAR, although in practice many didn't. But now Fatca means they have to be more rigorous or face huge fines, in the knowledge that the US authorities could know a lot more than they have in the past.

Many would say the IRS is only trying to get what it is owed, but critics say that in trying to track down the wealthy tax-dodgers, ordinary people are being dragged into an expensive and time-consuming form-filling nightmare. And for some, it's become too much.

Genevieve Besser American in Germany, who asked the BBC not to use her real name, gave up her US citizenship in 2011, 32 years after leaving for a new life in Scandinavia.
"This has nothing to do with avoiding taxes. I was never in danger of having to pay taxes in the US since I pay more here. The issue for me was that it was becoming harder and harder to follow the tax code and comply. It was difficult already but when I knew Fatca was coming, I thought, 'Do I want to go through with it anymore?'"

She felt threatened even if she did everything to fulfil her responsibilities, she says. A simple loyalty card at the local grocery store caused her anxiety when she realised it was linked to a bank account she never knew she had.

It became so complicated to do her tax return that she turned to professionals, at an annual cost of nearly $2,000 (£1,250), with the prospect of Fatca raising the price to $5,000. Also, fewer tax lawyers were taking on American clients, she says, and some banks were even turning away American money.

"In the end, I sleep better now knowing that I no longer have to worry about the US requirements. I will never be able to live or own property in the US but I can visit and that's enough for me."
Bridget, who runs an editing and translation company, says her strong emotional bond with the US has been frayed.

"I've enjoyed being an American even though I haven't lived there since I was young. I identified with America so I felt angry that I had to get to this point where it wasn't viable to keep my citizenship anymore.

"When you're an American living in America, it's one thing but when you live abroad in another country, in certain ways that feeling becomes even stronger because you realise that things that you think are individual characteristics are actually national ones so you identify even more strongly with your nationality.

"I used to always introduce myself as American but not now, although I will always be American in my heart even though I won't carry the passport. I will still celebrate Thanksgiving and 4 July."

She says the tax issue is the biggest topic of conversation among the expat Americans she knows. And tax lawyers in the US who deal with people living abroad say it has become a huge issue.

"I'm all for people paying their taxes, but it's very expensive to follow the letter of the law," says David Kuenzi, founder of Thun Financial Advisors, which specialises in helping Americans abroad with tax issues.
"Some people are spending $4,000-$5,000 a year to do their tax return only to find out they don't owe anything to the US."

Fatca has only created a little additional reporting for individuals, says Kuenzi, but it has generated a fear that the IRS will have full knowledge of people's assets. So reporting suddenly has to be assiduous, accurate and complete for every passport-holding American.

"You have very wealthy people hiding their assets and not paying their taxes and that's an outrage. Something should be done about it, but this reaction has created a terrible imposition on every American living abroad and it's way over the top," he says.

Foreign banks do not seem happy about it (http://dealbook.nytimes.com/2013/09/16/complying-with-u-s-tax-evasion-law-is-vexing-foreign-banks/) either, and Senator Rand Paul, a libertarian Republican, has introduced a bill seeking to remove aspects of the law related to data-sharing.

But the US Treasury is standing firmly behind the new law. In a statement on its website (http://www.treasury.gov/connect/blog/Pages/Myth-vs-FATCA.aspx), Robert Stack, deputy assistant secretary for international tax affairs, rebuts certain "myths".

"Fatca provisions impose no new obligations on US citizens living abroad... US taxpayers, including US citizens living abroad, are required to comply with US tax laws," he says​.

"Individuals that have used offshore accounts to evade tax obligations may rightly fear that Fatca will identify their illicit activities. Yet a decision to renounce US citizenship would not relieve these individuals of prior US tax obligations."

Those who have joined the ex-American club, or are thinking about it, say this is not about tax evasion.

Victoria Ferauge, 47, is married to a Frenchman and has lived abroad for nearly 20 years, primarily in France. If her adopted country finally agrees to Fatca then she wonders what the implications will be.

"Are my bank accounts going to be closed? Is my husband going to be forced to take my name off the accounts?"

Ferauge is unemployed and recovering from breast cancer so she doesn't have any income. She has paid nearly $1,000 to accountants this year but will have to get more expensive help next year.

With strong ties to the Pacific Northwest, and two parents to visit there, the Seattle-born 47-year-old would rather not renounce her citizenship.
"I don't know any Americans abroad who aren't thinking about giving it up but what I say to myself is that I will fight as long and as hard as I can.
"And it's only when I've exhausted all options that I will make that appointment with the US embassy."

mixture
27th Sep 2013, 21:19
OFSO,

This is news how ?

Those of us fortunate enough to live outside the US always knew about the ways of the US and their worldwide money grabbing tax laws. God knows why anyone would want to willingly become a US citizen.

Comes as no surprise they're getting stricter, the US politicians need to pay for all the bailouts somehow !

con-pilot
27th Sep 2013, 21:26
I guess one could keep one's money in the Cayman Islands, from what I understand, the banks there report to no one.

Now illegal earnings, from drug trafficking and the such, the Fed can go after them. But if a US citizen has lived out of the country full time for, say three years, to hell with the IRS.

Didn't we fight a war about this sort of thing about 237 years ago? The IRS is out of control.

I don't know if I would give up my citizenship. But, just in case, how hard is it to get an Irish citizenship? :p

OFSO
27th Sep 2013, 21:45
how hard is it to get an Irish citizenship ?

Funny you should ask. I was at a gathering with some gentlemen of Irish nationality last week, and upon my divulging that in 1806 my family lived in Dublin, they all urged me to send off for an Irish Passport right away. Apart from the fact that my family tree does NOT qualify me for Irish nationality, I found it quite touching that they all wanted me to be Irish.

Of course Con, you might consider travelling to Ireland, removing all your clothes, wrapping yourself in a gigantic nappy/diaper, lying down at the side of the road and waiting, because:

Deserted infants

Every deserted infant first found in Ireland will, unless the contrary is proved, (that is, the parents of the child come forward and clarify that the child is not Irish) be considered to have been born in Ireland.

BenThere
27th Sep 2013, 21:53
It's a worry for those of us contemplating leaving the States for other shores.

The tax implications, as I contemplate the move myself, are daunting. As I will be relying on US government pensions, Social Security and my military retirement, I can't just not comply with the requirement to complete the newly mandated expatriate tax forms.

I hope to beat the system by moving capital into my wife's account, out of the reaches of Uncle Sam. US tax-grabbing, I predict, will promote a huge outflow of capital from the US.

The bullying of foreign banks to comply won't win any friends either.

G-CPTN
27th Sep 2013, 22:02
Spike Milligan adopted an Irish passport when he was disenfranchised by Britain - he had been born in India and had served in the British Army during the War (but he had allegedly refused to swear an oath of allegiance).

mixture
27th Sep 2013, 22:02
The bullying of foreign banks to comply won't win any friends either.


Assuming you seriously think you've got any friends given that everyone outside the US knows about the bullying methods you guys like to employ when you don't get your way.

For example, I know people who work in the financial sector in Europe. These days, if a potential new client calls them up and asks to open an account and the prospect has any ties (however remote) to the US, these people will just say no. Its simply too much hassle for them to take on the new client, and they know all too well that the US related bureaucracy will only get worse, not better.

BenThere
27th Sep 2013, 22:05
they know all too well that the US will only get worse, not better.

Alas, it's the Democrats who are breeding.

MG23
27th Sep 2013, 22:11
As I understand it, there are major tax implications if you do renounce citizenship too. I seem to remember that if the US government decide you're doing it for tax reasons, they can seize any assets in America and refuse to let you return, even for short visits.

This is one reason some people I've met who lived in America on green cards didn't want to get American citizenship. In many respects these days, it's a liability.

flynverted
27th Sep 2013, 22:20
Many years ago I told family and friends that if King george bush was re elected potus, I was leaving the U.S. He was, and I did. I moved to Australia. :ok: I make 150k per year and am provided with a house (whirlpool bath, 3 bedrooms, pool, etc :ok:

racedo
27th Sep 2013, 22:24
Remember knowing someone years ago who renounced their US citizenship because they had a Scandanavian parents and a US parent , they were born in the US.

Their European country didn't like people holding second passports and they grew up in Europe and had no intention of living in the US.

What was interesting was that as following divorce one parent lived in US and one in Europe then when visiting the US they received lots of attention. Time and again they were questioned as to why they gave up US citizenship.............response of because I wanted to seemed to puzzle US immigration.

racedo
27th Sep 2013, 22:26
As I understand it, there are major tax implications if you do renounce citizenship too. I seem to remember that if the US government decide you're doing it for tax reasons, they can seize any assets in America and refuse to let you return, even for short visits.

You would be rather silly to hold onto assets in US if you intended to do this in the first place.

Dispose of assets over a period of time and move money then do it.

cavortingcheetah
27th Sep 2013, 22:33
The requirement by the US government that all trust, accountancy and finance companies that have business with the US must be Fatca compliant, has made paperwork sometimes more troublesome than it was up to now. Having said that, a simple tick box selection will enable any company to determine whether the name of a client should be forwarded to the IRS., Mr Stack is correct and so long as one has filed a 1040 in good faith and for all of the years one has been absent as a resident but still as a citizen, there is little likelihood of a problem although non relishes an IRS audit. The IRS has for a long time accepted as almost gospel, tax returns filed using certain computer programmes, TurboTax springs to mind, that are quite capable of the job. There's the rub though. US citizens who left their country years ago have not been filing returns. They fully knew the laws of the US in that respect. It's a clearly understood responsibility of citizenship. This will trip many tax evaders and is as artful a government dodge as many that have been used by some of my close American friends who live in Switzerland or who live in Britain and sail very close to the wind in terms of reciprocating treaty double taxation where, for example, all income that derives advantage from a US double treaty rate should only do so if it is declared to the other treaty country in full.
Commiserations perhaps but no sympathy when the tiger turns.

MG23
27th Sep 2013, 22:39
If I remember correctly, there are only four countries on the planet which expect citizens to file tax returns and pay tax when they don't live there. And I believe America is the only one in the developed world.

racedo
27th Sep 2013, 22:44
And I believe America is the only one in the developed world.

Has this been proven ?

Not the taxes bit, the other bit......

mixture
27th Sep 2013, 22:51
Has this been proven ?

Its a known fact the US has taxed nonresident citizens for as long as anyone can remember.

If Wikipedia is to be believed the only other country is Eritrea.

cavortingcheetah
27th Sep 2013, 22:58
The US presumes that you will always live within a tax jurisdiction. The principal behind the US double tax treaty system ensures that the US ex pat will, if paying tax elsewhere, always have the tax revenue rate tilted in favour of that country.
If a nation wishes to make its citizens order their tax affairs so that there is a matter of record with their homeland, whose to gain say that? Those US citizens who live abroad and have complied with the law of their land, filing every year, have nothing much to worry about. Those who have broken the law do! It matters not one whit that the Brits, for example, have a more laissez faire attitude to international tax than do the Yanks. Heavens to Betsy, there are plenty in the halls of power in England who'd like to see the same base line for taxation based on citizenship. Give Red Ed a term in office and the new British Residence and Domicile Laws will come off statute to be replaced with, if not by British Citizenship then certainly European Citizenship once Clegg leaves the UK and returns to his Dutch roots or his Spanish adoption.

MG23
27th Sep 2013, 23:02
If a nation wishes to make its citizens order their tax affairs so that there is a matter of record with their homeland, whose to gain say that?

No-one. But it does make US citizenship a liability.

The British government know we'd all renounce British citizenship rather than pay them tax, so they won't do it. Plus, the EU probably wouldn't let them.

Loose rivets
27th Sep 2013, 23:10
This is one reason some people I've met who lived in America on green cards didn't want to get American citizenship. In many respects these days, it's a liability.

I'd be interested to know if there was any difference. Perhaps not, since the tax on thippence a week doesn't amount to very much.

mixture
27th Sep 2013, 23:14
I'd be interested to know if there was any difference.

A quick Googoo reveals the following statement from the IRS

A green card holder is considered to be a resident of the U.S. for U.S. income tax purposes and is therefore subject to U.S. taxes on worldwide income.

dead_pan
27th Sep 2013, 23:14
It's a worry for those of us contemplating leaving the States for other shores

Are you really considering leaving Ben? Whereabouts are you thinking of settling? I assume Europe is out of the question, given its political leanings. Somewhere like Russia may be a good option, after all it looks quite favorably on disaffected Americans seeking a new home (particularly if they have something to offer, like information or whatever), and I doubt they'd have no qualms about telling the US authorities to go u-know-what themselves if they tried to pry into an ex-citizen's financial affairs. Oh and their leader is so well regarded at the moment :ok:

I met a Brit who was employed by a rather well known software company based in Seattle some years back when it was all new and interesting. His colleagues were staggered when he turned the chance to get a green card; he knew even back then the IRS would simply never leave him alone for the rest of his working life, and possibly beyond, even if he never set foot in the US again. Also heard stories about all those Koreans who gleefully accepted US citizenship, and are now deeply regretting their decision for similar reasons.

cavortingcheetah
27th Sep 2013, 23:16
Certainly, US citizenship can be a liability and those who wish to loose it are at liberty to try for another. I do believe though that on renunciation of citizenship, there is still a US Requirement to file a 1040 for eight or ten years?
Britain is the same in that respect. Even though you may think yourself a non resident either under the terms of the new statute or the rules of HMRC6, you've still got to keep whacking in a return until they tell you not to bother. One of the more unassuming provisions for box ticking in the new residence law is the one that 'requires' you to spend more time in any one other country than you do in Britain. The folks on Residence Sea must be deeply worried.
The real problem for the Americans who have transgressed is that it is exceedingly difficult to do deals with the IRS.

MG23
27th Sep 2013, 23:21
I'd be interested to know if there was any difference. Perhaps not, since the tax on thippence a week doesn't amount to very much.

From what they said, if they leave America permanently, they have no requirement to deal with the IRS any more. Doesn't the green card require that you spend at least six months in the country each year to retain it?

Of course, they may have been wrong...

racedo
27th Sep 2013, 23:28
Its a known fact the US has taxed nonresident citizens for as long as anyone can remember.

If Wikipedia is to be believed the only other country is Eritrea.

Oh know all that .......................bit about US being in the developed world I was asking about.

mixture
27th Sep 2013, 23:29
bit about US being in the developed world I was asking about.

Oh right. Well, ahem, cough. No comment. :E

racedo
27th Sep 2013, 23:32
Certainly, US citizenship can be a liability and those who wish to loose it are at liberty to try for another. I do believe though that on renunciation of citizenship, there is still a US Requirement to file a 1040 for eight or ten years?

Drone strike if you don't will be punishment by 2020 I guess

BenThere
27th Sep 2013, 23:57
Are you really considering leaving Ben? Whereabouts are you thinking of settling?

Thanks for asking. Australia, for now, so as to give my long suffering wife the opportunity to be with her family, as she gave up so many years with them to be with me in the US.

Down the road I may grow a long beard, write an opaque enigma, and become a guru, residing somewhere exotic, like Kuala Lumpur. From there I'll sell ancient salts, creams and supplements to American and European rubes over the internet that promise to stop their aging. I'll hire J-Lo to promote it.

What're you going to do.

500N
28th Sep 2013, 00:01
BenThere

You can do the same from Australia where you are planning.
In fact, it would be quite nice doing it from there.

parabellum
28th Sep 2013, 00:31
I have not lived in the UK since 1989. If you derive any income from the UK, including state pensions, they can require an annual tax return but if there is no change of your financial circumstances over a period then they will tell you that you don't need an annual return and will stop sending you the form. In the UK it is the taxpayers responsibility to advise the tax office of any change in financial circumstances that might effect your UK tax liability.

BenThere - Australia don't want to know about income derived from overseas if you are on a visitors visa, if PR etc. then yes, but they make allowance for tax paid overseas on income derived from overseas, such as pensions etc.

Solid Rust Twotter
28th Sep 2013, 07:46
Thanks for asking. Australia, for now....Down the road I may grow a long beard....


Shouldn't be a problem in Darwin. Shave your head too and you'll fit right in.

Took me a while to figure out I hadn't stumbled into a ZZ Top tribute band convention.:}

cavortingcheetah
28th Sep 2013, 08:32
The purpose of Fatca is to ensnare past American lawbreakers and to set a line in the sand for the observance of future ones. One can but hope that the iRS will use the act in a pragmatic fashion and that the very rich as well as any other tax evader will fall into the catchment net, thereby ensuring a fair distribution amongst the financial criminal classes of revenue penalties for the US coffers.
It's not only banker bashing really only this time, instead of bashing the bankers who've been running off with tax payers bail out money, the government is bashing the tax payer whose running off with the money the government needs to buy warships to protect, we'll, perhaps Britain! That little country whose latest military review showed it needed 33 frigates and destroyers to protect itself and it's international commitments possesses 19 and relies upon the Americans for it's supposed military might just exactly as it depended on the Scots, the Irish and the Prussians in the past.

Metro man
28th Sep 2013, 08:53
I am very thankful not to be a US citizen, these days it's just not worth the bother. A Green Card holder is taxed on worldwide income but if the card expires so do your obligations and residence rights, you're FREE !

A US citizen who renounces, may be obliged to pay US tax for ten years afterwards. Some people have found themselves classed as US citizens through birth but have never lived or worked there and are being pursued by the IRS for back taxes and penalties.

Australia has tax on worldwide income for residents, but not for citizen non residents living abroad. Just make sure you stay out of the residency net as a few commuting Cathay Pacific pilots have found out to their cost. I made very sure I met the non resident definition when I left, keep a house available and wife/children living their and you are asking for trouble.

A US passport is only attractive if you are living in a refugee camp, all others avoid.

cavortingcheetah
28th Sep 2013, 09:11
Metro Man is quite correct in his second paragraph. Some American citizens, especially older post war double nationality babies, have no idea that the US State Department regards them as citizens, especially if they have, even unwittingly, conformed to the older five year residence test applied between the ages go 14 & 23. But then again, ignorance is no more a defence in a democracy such as the USA than it us Ina socialist state as in the UK.

ExSp33db1rd
28th Sep 2013, 09:20
My USA wife is not unintelligent, but spends 364 out of 365 days worrying and belly-aching about completing her US tax committments which as a result of the recent changes being discussed are causing her many times more distress, there are now not enough days in the year to accommodate all her fears and problems. NO tax accountant or lawyer can help, either they are in the USA and don't believe that anything exists outside the shores of the USA, so can't help with foreign problems, or live outside the USA and don't understand - period. Her queries to State Dept. telephone numbers advise her that she can't talk to them, she has to direct her enquiries to the South Pacific Office, based - wait for it - in Manilla. The mind boggles.

If she were less intelligent she probably wouldn't know enough to upset her - I point out that if she, amongst the literate and intelligent has this problem, what do the other 300 million US citizens do ? i.e. stop worrying, she is doing her best, one can do no more. Doesn't work, life is constantly stressful as a result. (yes, she does use TurboTax, but even that has issues if you are married to a foreigner and living in another foreign land.)

The partial answer is to never leave the US of A - and marry the boy next door.

US banks are now refusing to accept her US pension and social security cheques, and also refusing to pay long standing periodic payments from her accounts, because she can't provide a US address.
( and thanks to the comments from some about this problem on another thread recently, sadly not as simple as some suggested )

cavortingcheetah
28th Sep 2013, 09:38
If you haven't filed in the past then eventually you will be discovered and could in theory find yourself arrested at immigration on a future visit to the US.
If you already entry filed, TurboTax have updates which might help.
If you don't want to file then eventually you'll become trapped. The IRS is currently running an amnesty programme. Penalties are significant but those for non compliance are huge.
It's all been thought through and the punter can draw a line in the sand and move on from there. It is an excellent idea which has been implemented over a vast canvas with some considerable forethought for the guilty, the stupid and the crafty. It should please the sort of American whom we Americans like to see waving the flag and upset those who are undesirable because their desires are less than consciousable.

cavortingcheetah
28th Sep 2013, 09:59
Always assuming one still files that 1040.
A simple power of attorney, limited to one small aspect, gives one a US address.
Pension and SS payments can be organized as on line payments.
Banks such as Wells Fargo have European standards of internet and pass key banking which could now by arranged to operate from a telephone. It's very easy at WF to have money wired in and to have the same wired out. It's easier to keep it all in $ denomination but even that is not necessary for outgoing payments.

You might of course have to go Stateside to set this all up but I always find that a tax deductible business trip to Minneapolis is a bonus outside of mosquito time.

You might enjoy this.

http://taxconnections.com/taxblog/americans-tear-up-passport-avoid-fatca/#.UkaUf-e9KSM

radeng
28th Sep 2013, 14:13
An American I know who lives in Switzerland told me about filing the 1040 form for ten years after giving up US citizenship. The IRS even wanted his son (born in the US, Swiss nationality for 8 years, 23 years old) to file a form 1040.

Metro man
28th Sep 2013, 15:25
A true example of a police state, if someone wants to leave and give up the benefits of citizenship then he should be free to do so without further obligation. Ten years of paying taxes in return for no benefit what so ever is modern day slavery. If someone lives in a country and enjoys the privileges and protections of citizenship then it must be paid for but if he wants out then his obligations should cease.

cavortingcheetah
28th Sep 2013, 15:39
You don't necessarily have to pay tax for ten years, only to file a tax return in order to see whether you owe any back funds, whether you have stolen from the system which has given you so much nurture and which you now flee in ignominy for reasons only of treachery or infamous behaviour like Philip Nolan.
This simple precaution is nothing more than a sorry reflection on the quality of the population groups that have formed the basis of the United States peoples since the virtual extermination of the Redskin. Since America welcomed the human dross of the world with open arms in the old days it is only fitting that it should release them reluctantly today knowing that as dregs they came with nothing but the clothes they stood in but when they leave who knows with what mass of putatively purloined property they might be burdened and what crimes they might have committed in their quest for glory and gold.

dead_pan
28th Sep 2013, 17:06
If someone lives in a country and enjoys the privileges and protections of citizenship then it must be paid for but if he wants out then his obligations should cease.

My thoughts exactly. I always wondered why up and coming nations seeking wealthy western migrants don't bid for these peoples' taxes i.e. here's what we'd give you in return for you paying X taxes.

Also, I wonder if the US's position could be challenged here in the EU under human rights auspices, my thinking being that citizens living in the EU (regardless of their origin) should only have taxation obligations to their resident nation state.

mixture
28th Sep 2013, 17:14
Also, I wonder if the US's position could be challenged here in the EU under human rights auspices, my thinking being that citizens living in the EU (regardless of their origin) should only have taxation obligations to their resident nation state.

Given the utter contempt US Corporations show for EU law (e.g. Google claiming European privacy laws do not apply to them), I doubt the US government would pay much attention to any ruling either.

dead_pan
28th Sep 2013, 17:20
What're you going to do.

Thank you for asking. No immediate plans yet, although I think I'm a few years behind you in age so its not currently a pressing decision. I do harbour this mad idea to live six months a year in each hemisphere and live in continuous summer, which I reckon would greatly enhance my life expectancy. I have half-thought about places like Cape Verde for the winter (not quite the southern hemisphere, but near enough) - its bleak, ascetic landscape would resonate with my personality. The fishing supposed to be pretty good too. As for the other half, it would almost certainly have to be Blighty. Despite its many faults, I still reckon its a great place to live. I'd hate to be one of those bitter ex-pats harking back to the good old days, like some jilted lover :ok:

MG23
28th Sep 2013, 17:44
My thoughts exactly. I always wondered why up and coming nations seeking wealthy western migrants don't bid for these peoples' taxes i.e. here's what we'd give you in return for you paying X taxes.

If I remember correctly, this whole thing began because rich Americans were moving to countries like Switzerland which said 'pay us $50k a year in tax and we'll forget the rest', then renouncing citizenship so they didn't have to pay millions a year to the IRS.

To an extent I would agree that people who expect to move back to another country after years abroad should pay some taxes while they're gone, but, at the same time, that's heading toward making citizenship just a flag of convenience: 'which country should I be a citizen of this year to minimize my taxes?' That's a dangerous road for countries to go down.

OFSO
28th Sep 2013, 17:55
'which country should I be a citizen of this year to minimize my taxes?' That's a dangerous road for countries to go down.

In fact this is not an option (outside the USA and Eritria.)

You do NOT have a choice.

You pay your income tax where you spend 183 days or more in a calender year and/or where you have your centre of interest. Most (maybe all) countries in the EU have rules & regs against double-taxation, so if you must pay tax in one you get it refunded in another. A few years ago Swedish nationals living in Spain received more back from Madrid than they had to pay to Stockholm, which is nice.

(And please, please don't start a discussion on domicile etc. It's not pertinent for British nationals living abroad long-term who remain in one "foreign" country for years and years).

MG23
28th Sep 2013, 18:04
You do NOT have a choice.

You do if you're a billionaire.

And if more countries start saying 'you're going to pay millions and millions in tax even though you don't live here', they'll start picking citizenship based on which charges the least. It's not as though they need to live in America these days, when communication is so easy.

OFSO
28th Sep 2013, 18:17
You do if you're a billionaire.

Actually, no.

The problem is you still have to live SOMEWHERE. You can live in three or four or five etc. countries, each for less than half a year, travelling round, but the billionaires we know sooner or later have received a letter from one or more tax authorities asking where they live.

You can live on your yacht but the same thing applies: it must be registered somewhere and the registration carries with it tax implications.

What acquaintances have done is to have their legal residence in a country with the lowest tax demands (not the same thing as NO tax demands). Then of course you work for a company (based in a middle-European Duchy) which pays no salary but from which you can withdraw a certain sum of money each year for 'living expenses'. Taxes on this can almost be eliminated if that company has to pay huge interest charges to another company (which you also might own) and 'service charges' and other 'repayments'.

You might want to look up this website for how it's done:
https://www.google.co.uk/#q=tony+blair+company+structure

MG23
28th Sep 2013, 18:28
You do if you're a billionaire.

Governments like billionaires. Getting citizenship in many countries is not hard if you're bringing vast amounts of money with you.

You seem to have missed the fact that I'm talking about a future where more and more governments may demand that citizens pay tax even if they don't live there, not the present day. At that point, citizenship would become little more than another tax issue for accountants and lawyers to work out. 'This year we recommend you become a citizen of Lithubuntistan, sir'.

con-pilot
28th Sep 2013, 18:31
I do harbour this mad idea to live six months a year in each hemisphere and live in continuous summer

Now there is a man with a plan. I've the same mad idea, unfortunately SWBO does not seem to agree with my plan. :(

Much like my fabulous idea of selling our home and use my Marriott points to live in Marriotts for the rest of our lives, using the proceeds from the sale of the homestead to pay for incidentals (booze). I'll not repeat the language she used in outright rejecting my great idea. :uhoh:

BenThere
28th Sep 2013, 18:49
Many countries will let you establish merely by showing you have a pension or other monthly income from as low as $1,000/month.

I had a chat with an elderly guy in the Narita Skyclub who said he lived in an apartment overlooking Manilla Bay, had a maid who kept his place up, and ate most of his meals out on his net of $1200/month. He had enough left over to travel back to the States every year, which was what he was doing when I met him. How he was able to use the Skyclub on that budget, I don't know.

Teldorserious
28th Sep 2013, 18:53
Taxes in the US aren't that bad, and you have to be making more then 90k a year or so offshore before you need to start offering up a percentage back home.

So this is really about making big bucks, established living offshore, content to stay there, and not really seeing a big benefit of 'coming home'.

ExSp33db1rd
28th Sep 2013, 21:00
.......Pension and SS payments can be organized as on line payments.....

Maybe, but not so easy for the more 'senior' seniors, and my wife has been contentedly organised, until this year, when the banks, who have doubtless been charging an arm and a leg over the years, have suddenly said "April Fool" go away and don't darken our doorsteps again, and for what, only the mainly law abiding who try to do their best are being inconvenienced by all this stable door shutting, the real bad guys just come up with another cunning stunt and laugh in all your faces. And carry on as usual.

G'day.

dead_pan
28th Sep 2013, 21:48
The problem is you still have to live SOMEWHERE.

Is this true? You do hear about people who are stateless i.e. have nowhere to live. Admittedly they tend to be refugees who've been displaced for whatever reason. I wonder if some enterprising tax accountant could devise a scheme whereby wealthy individuals are able to categorize themselves thus - one can imagine their dinner party patter: "Yes, for tax purposes I became an Afghan citizen in order that I could then flee from the country as a refugee".

dead_pan
28th Sep 2013, 21:54
Then of course you work for a company (based in a middle-European Duchy) which pays no salary but from which you can withdraw a certain sum of money each year for 'living expenses'. Taxes on this can almost be eliminated if that company has to pay huge interest charges to another company (which you also might own) and 'service charges' and other 'repayments'.

Akin to Amazon's/Google's/eBay's/etc mind- and reality-bending tax avoidance wheezes.

Loose rivets
29th Sep 2013, 00:50
Quote of a quote:

A green card holder is considered to be a resident of the U.S. for U.S. income tax purposes and is therefore subject to U.S. taxes on worldwide income.


Yep, that's how we've always understood it.

Metro man
29th Sep 2013, 00:58
The "Perpetual Traveller" method is worth looking into for the relatively wealthy.

1. Citizenship from a country which doesn't tax it's citizens living abroad and whose passport offers few travel restrictions. Eg Ireland, Switzerland, Singapore

2. Residence in a tax free or low tax country. Eg.Dubai, Singapore, Hong Kong.

3. Assets located or managed in a stable, low tax country, as above.

4. Income from a tax free source, Eg Middle East.

5. Playground, places where you spend your time, avoiding being there long enough to be classed as resident. Can be anywhere you like ; Thailand, France, New Zealand etc.

An Irish citizen working in Dubai with his bank account in Singapore investing on the Hong Kong stock exchange and spending his time off in Thailand would have very little if any tax liability anywhere.

An Australian with no ties down under who flies for Cathay Pacific, owns an investment property in Singapore, banks in Jersey and spends his time off on the beach in the Philippines would be paying very little in the way of tax.

It can be done with the correct arrangements.:ok:

Teldorserious
29th Sep 2013, 07:35
I think while there is a financial incentive for the wealthy to leave, for the non wealthy just trying to hang on to what they have might be induced to bail for the following reasons -

The US has become a country of merchants and thieves:

The investment markets are gamed and you can't trust mutual funds, advisors or pension plans.

The doctors will bankrupt a person fixing a broken leg - half the bankruptcies are for medical bills.

A car in the shop is not a 'fix' but something you take 6 months to pay off on a credit card. Ponder $4000 transmission and a shop visit is a grand on a $3000 car.

Prop taxes are a game to enrich the govt employees...cops are handing out huge fines for speeding, not properly stopping at a stop sign. Politicians have put the country in debt, squandered resources, and are always finding new ways to start wars and get the citizens to pay for it.

Everything on tv is complete garbage. Everything is branded, hyped, marketed, and all set up to sell you something. It's all pop culture, celebrity gossip, crass consumerism and rampant materialism. There is no culture here, there is no history, other then that of screwing the indians, then screwing each other over, to make a buck, to buy crap we don't need, to impress people we don't like.

Housing is about everyone from the appraisers to the bank to jump on the deal, get their cut, and no one owns a home, they just spend their whole lives paying it off, renting the land from the govt through prop taxes.

Cars, goods, anything you buy is disposable. Nobody works on anything, nothing is kept around. It's all based on getting you to buy in, upgrade continuously, nothing can be fixed.

It's a country of minimalls, movie theaters, and a culture of doing nothing - surf the net, pop in a movie, go to work, take your ambien, drink a beer, get up the next day, do it all over. For recreation, you go out and spend money on crap you don't need thinking it will make you happy, and everyone has bought into it. So try fighting that uphill battle.

The food here is crap, too many cell phones, it's a toxic place to live where the govt is in bed with the cell phone companies, water companies, Monsanto. Nothing is healthy. There is such a prevalance of obesity, cancer and diabeties that it should be alarming, but that would require people to stop eating junk and pesticide GMO ridden food. Not happening.

This is where you have rampant child molestors protected by the church, a serial killer for every million people, date rape is college sport, rape in the military is a given, and no one cares.

Public schooling is about stretching out and industrializing a soul sucking tome of comformity and compliance, hardly preparing them for colleges, which have become nothing more then profit centers, leaving millions in debt they will never be able to pay off.

This is a society that is simply only interested in making a buck, watching tv, and simply being comfortable at everyone elses sake. You are hard pressed to find anyone here that just wants to do the right thing, for the right reasons, because it's the right thing to do. A country of money centrik apathetic nihlists have little room for transcending, doing more, getting better.

dead_pan
29th Sep 2013, 08:19
Teldorserious- blimey that's quite a polemic. Its pretty much true of the whole of the "developed" world.

cavortingcheetah
29th Sep 2013, 08:32
And, as many who've walked through the bazaars of the East, the Orient and Afrika or done business with the Chinee, the Musselmann and the Hottentot will tell you, everywhere else too.

Capetonian
29th Sep 2013, 08:40
I enjoyed reading that, I might have appreciated it even more after my first cup of 'Fairtrade' tea and Muslim/Kosher bacon wrap! It applies to pretty much any western 'democracy' you can think of.

If you want to take it a step further, into Africa, you can add the rampant racism, corruption, nepotism, and fraud, enacted and sponsored by the 'democratic' governments that the smug and complacent brown-tongued lefties of the west supported and put into place.

dead_pan
29th Sep 2013, 08:48
you can add the rampant racism, corruption, nepotism, and fraud

..and that's before you've even left the front door:ok:

enacted and sponsored by the 'democratic' governments that the smug and complacent brown-tongued lefties of the west supported and put into place

Here you go again, blithely ignoring factors such as tribalism, colonialism, the Cold War etc etc.

ExSp33db1rd
29th Sep 2013, 08:49
World's Gone Mad.

Loose rivets
29th Sep 2013, 09:15
It used to be said, 'the world's going to the dogs.' Now, I'd say, it's gone to the dogs . . . whatever that means.

The thing about being poor, or even so-called middle income, is you see things from Teldorserious' point of view all too clearly. So called success allows a shield from the misery of being on the treadmill. Well, for the people that are not burdened with conscience, that is.

I still wonder if Michael More was right when he said that ALL American income tax goes to pay only the interest on loans to the government - to private individuals. I can well see their desire to maintain the status quo.

dead_pan
29th Sep 2013, 09:25
Sort out back to thread topic, my other mad idea was to gather together a group of like-minded people and buy a huge swathe of barren coastal land in west Africa (somewhere like Mauretania), then declare independence. Our collective pensions could then be leveraged to buy in infrastructure (e.g. a massive electrified perimeter fence with attendant free-fire zone, accommodation, a recreational fishing port, maybe a golf course or two), healthcare, our very own army/air force/navy etc as we see fit. Any takers?

Doodlebug
29th Sep 2013, 09:49
We tried that back in 1884 already, called it Deutsch-Südwestafrika. It was a great gig while it lasted.

cavortingcheetah
29th Sep 2013, 10:15
'They' tried that back a little further north on the same continental mass in 1820. 'We' made rather a lesser mess of things than did 'they'.

Solid Rust Twotter
29th Sep 2013, 10:19
Holding your map upside down, Mr Cheetah?

cavortingcheetah
29th Sep 2013, 11:04
Well, I don't think so, Liberia is north of the Equator.

Solid Rust Twotter
29th Sep 2013, 11:19
That'll teach me to read the post properly...:uhoh:

baggersup
29th Sep 2013, 11:37
Some people have found themselves classed as US citizens through birth but have never lived or worked there and are being pursued by the IRS for back taxes and penalties.

So has that scofflaw Boris Johnson paid up? :D

cavortingcheetah
29th Sep 2013, 15:39
President Johnson then?

Teldorserious
29th Sep 2013, 16:41
Going off and starting a utopia has been tried..varied success.

I think much of this just comes down to increasing population density. The US started with the right premise, and for a while, it worked. It's ran it's course, the train is heading for the broken track, like a Spanish train with a conductor texting his girl friend, stepping on the gas, apathetic, unprofessional, nihlistic..carrying passengers that expect professionalism, but certainly don't offer it up themselves. They want a cheap ticket, expectations are low...and they get what they pay for.

Metro man
29th Sep 2013, 21:51
Better still live permanently at sea.

http://www.utopiaresidences.com/index.php

Loose rivets
29th Sep 2013, 22:11
View from one's front window in 2011. East coast at 04:00-ish. (still zoned out.)

The blob on the horizon is an amalgom of Sealand and sadly, a ship that picked that moment to sail by. Some of the contour of Sealand is in the blob.

My pal and I took a trip out there on his yatch, yotch, boat. We sailed out there on his boat. I was a bit concerned they fire at us too, but seeing the above thread, I'm now not certain he was the bad guy.



http://img.photobucket.com/albums/v703/walnaze/SunriseS_zpsf2311cbe.jpg (http://smg.photobucket.com/user/walnaze/media/SunriseS_zpsf2311cbe.jpg.html)

G-CPTN
29th Sep 2013, 22:58
The World - Luxury Residences at Sea (http://aboardtheworld.com/)

Our Story - The World, Residensea (http://aboardtheworld.com/our_story)