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  #21 (permalink)  
Old 22nd May 2016, 11:41 PM
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Hello ersterhernd

Thank you so much for the advise. and yes this does seem a sensible course of action. I have actually asked my accountant this information over the weekend so will wait to see his response.

but my intention was to either back file 2011 now and then wait until the end of July to book the renunciation appointment for the autumn this year. I can request a transcript. Also I sent my streamlined returns by DHL so I can prove they were sent to the correct address and received.

or renounce in 2017 at the very earliest opportunity. try to file 2016 beginning of the year so as not to delay. i would rather try to get the appointment in this year if I can because of the long wait to receive the CLN in general. But pre-booking it seems to be good idea.

So this post with the email is very helpful for sure.

Good luck as well with your renunciation plans.

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Old 23rd May 2016, 07:31 PM
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Hello ersterhernd

You kindly provided me some advise about your situation mirroring mine and I have actually decided to try to renounce this year if I can. My accountant works with some legal counsel for the form 8854 not that I particularly need legal counsel but i want to make sure the form 8854 is done correctly. I don't want to risk being a covered expatriate.

We are going to back file the 2011. The worst that can happen is I get a late filing penalty. The numbers show no tax owing.

Then I am going to have a little break and renounce in the autumn.

I contemplated it but don't think I can put up with the burden every year of compliance costs and compliance in general. Also it might get harder to get out in future so if there is any thought to getting out, best to get out now. I just want to get back to financial freedom.

I will keep you updated if anything comes up.

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Old 23rd May 2016, 08:05 PM
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Just a reminder that once the oath of renunciation is actually administered, the process of filing the final tax paperwork can begin. It can take an unpredictable (and sometimes considerable) length of time to receive the CLN, but eventually it will arrive. No need to wait for a piece of paper. The last day of US citizenship will be the day before the "ceremony", not when the CLN is finally in hand.

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  #24 (permalink)  
Old 23rd May 2016, 09:11 PM
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Hi Maz57

Yes the legal counsel explained it all. First we file the 2011. then book the renunciation appointment for the autumn. The legal counsel will actually fill out all the renunciation forms. I'm capable of doing it myself but since they are doing the 8854 I might as well have them do the forms as well to ensure I don't mess those up.

I don't think the department of state will question my reasons that much. My last US passport expired in 2004 and hasn't been renewed since. I haven't been back to the US due to work commitments and other plans with my partner for holidays.

It's a hard decision to make but the only practical one. I want to live a normal life and I need to protect my non- US citizen spouse. If penalties were ever assessed for any mistakes in future on fbar or filing, it's not fair that our assets can be threatened by the IRS penalties even though he's not a citizen. He earns most of the money in our household.

Also I am looking to start a business next year and I found out about consequences for that too and my business partner won't want to deal with the IRS. It's something that I've been planning for a while and change of work circumstances makes it possible now.

and form 8854 will be filed in 2016 before June 2017 filing deadline.

Of course I could still change my mind but it's unlikely. The whole US filing thing came as a shock to me and in some ways I am suffering from post traumatic stress disorder. I have nightmares at night about tax. and I resent being made to feel like a tax evader when I have done nothing morally wrong. I truly believe expat law is going to worsen. The original concept behind CBT doesn't work anymore in the 21st century (not trying to start a debate about that again though!)

I will keep people updated.

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Old 23rd May 2016, 10:02 PM
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also interesting fact that the legal counsel told me is that to be exempt from the exit tax not only do you need to be born a dual citizen but also be a tax resident of that other country. so I need clarification on what that means exactly. Today was just a phone call, the meeting in person won't happen until end of June or beginning of July.

so all the more reason to terminate my US citizenship now. Our assets are creeping closer and closer to the 2 million mark every year. London properties are over priced now.

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  #26 (permalink)  
Old 23rd May 2016, 10:04 PM
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basically i don't know if he meant born a dual citizen and a tax resident of that country at birth as well or born a dual citizen and be a tax resident of that country now. so will get clarity.

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Old 23rd May 2016, 11:09 PM
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@ celticweb,

Looks like they mean a tax resident at this point in time, not at birth, because although they use "continue to be" for the citizenship, they use the present tense "are taxed as a resident" in the 8854 instructions, page 3, column 1.

“You became at birth a U.S. citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country.”

Also you can't have been resident of the US for more than 10 of the 15 years prior to renunciation, but if I recall correctly you haven't been, so no worries there.


Last edited by Pacifica; 23rd May 2016 at 11:18 PM.
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  #28 (permalink)  
Old 23rd May 2016, 11:26 PM
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I hope you're right. It was only when I hung up I started considering the implications of what was said.

I thought maybe he meant dual citizens that are born overseas outside the US and become a dual citizen at birth. Not those automatically becoming dual citizens born in the USA. for example, a US person having a child in the UK with a British citizen husband, their children with be automatic duals and their children would be UK tax residents at birth.

But in my case, being born over in the USA, yes I am automatically a dual citizen at birth but wasn't a UK tax resident at birth. see what I mean!

I like your definition better.

When I find out, I will let the forum know. This is a top well known UK firm that mainly deal with high net worth individuals and individuals in the financial industry but limited to that so I know whatever I am being told is correct.

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Old 24th May 2016, 01:29 AM
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Quote:
Originally Posted by celticweb View Post
Our assets are creeping closer and closer to the 2 million mark every year.
That doesn't matter. Your assets matter for these purposes. So, for example, if all assets are marital(*), and if your total household global net worth is $2.5 million (let's suppose), then your total global net worth is $1.25 million....

....But even if your personal total global net worth reaches $2 million that still often doesn't matter thanks to the two major Expatriation Tax exemptions.

(*) They don't have to be. For example, if your name is not on the deed to the home you live in -- and your spouse's is -- it's (ordinarily) not your asset.

There are a variety of views on "protecting your spouse." There are those who argue that a diversity of citizenships within a marriage is a potent, useful way to protect spouses. If one spouse for some reason needs to leave his/her country, the other spouse's other citizenship then becomes very useful indeed. But in terms of asset protection from the IRS, you are perhaps touchable (maybe), but your foreign spouse's assets in his/her name (and not yours) certainly are not. With due respect, I think you've got a little more work to do to understand how this stuff actually works. I have no objection to whatever decision you make, but it is important to understand the facts involved as accurately as possible.

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  #30 (permalink)  
Old 24th May 2016, 01:53 AM
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Hi
I get what you're saying but our main principle house is owned jointly. and the IRS does not care about joint ownership. it's a house in the middle of London and completely over priced now but that's the cost of houses now.

The rental property is mine, it was my flat before I got married and I started renting it after my spouse and I bought our house jointly.

Other assets, some are joint, some are mine, some are his. also if something happens to me, i don't want him having to deal with US inheritance laws. If we are both UK citizens only, an estate is exempt from Inheritance Tax if the deceased left everything to their husband or wife. It's better if we are either both be UK citizens only or both US citizens only and the first option is more feasible.

I worry about suddenly starting to transfer assets. I don't want it to look like I am trying to hide anything.

Of course I will check everything with the counsel. As I said, they deal specifically with cross border estate planning, US/UK integrated estate planning and deal a lot with high net worth individuals. Not that we need so much legal council. It just happens that my accountant works with them on expatriation cases with the form 8854 so might as well take advantage of the experienced professional advise.

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