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Discussion Starter · #1 ·
I'm a naturalized US citizen. I plan to move to Australia as permanent resident. If, in the future, I plan to become Australian citizen will I loose my US citizenship? Australia permits dual citizenship.

I read that historically I would have forfeited my US citizenship if I have naturalization in a foreign state. But in 1990, the US State Department adopted a new regulation so that you don't have to give it up.
http://attach3.bdwm.net/attach/boards/PKUdevelopment/M.1323515948.A/96-13402.pdf

Can anyone confirm or has anyone done this before?

Thanks
 

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It's not actually a new regulation - but rather a Supreme Court decision that says that you don't lose your US citizenship merely by taking another nationality. You'll keep your US citizenship until and unless you renounce formally before a consular official (and that will cost you $2350 these days).
Cheers,
Bev
 

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Don't forget to keep filing your taxes in the US once you live in Australia!
 

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I read that historically I would have forfeited my US citizenship if I have naturalization in a foreign state. But in 1990, the US State Department adopted a new regulation so that you don't have to give it up.
http://attach3.bdwm.net/attach/boards/PKUdevelopment/M.1323515948.A/96-13402.pdf

You don't have to give it up, but you can if you want to -- that is if you perform a potentially relinquishing act voluntarily with the intention of terminating your US citizenship by so doing.

Immigration and Nationality Act, s. 349

“(a) A person who is a national of the United States whether by birth or naturalization, shall lose his nationality by voluntarily performing any of the following acts with the intention of relinquishing United States nationality—
(1) obtaining naturalization in a foreign state upon his own application or upon an application filed by a duly authorized agent, after having attained the age of eighteen years; or …[the remaining 6 relinquishing acts, including renunciation, are listed].”


The Supreme Court ruled in Vance v. Terrazas that the US can’t terminate a person’s citizenship if they perform one of the relinquishing acts set out in the Immigration and Nationality Act unless the person intends to relinquish their citizenship by so doing, which caused Dept of State to adopt the administrative presumption that a person intends to keep their citizenship – but it’s a rebuttable presumption.

Can anyone confirm or has anyone done this before?

Thanks
It seems to be a pretty common method of citizenship termination. I relinquished and obtained my Certificate of Loss of Nationality under s. 349(a)(1) and know personally about a dozen people who have and am aware of around 50 others.

I haven’t seen any scientifically-gathered data on it, but FWIW, from people who’ve sent in their information in to the Isaac Brock Society’s database, relinquishment by naturalisation (INA, s.349(a)(1)) is the second most common method of expatriation, with renunciation (s. 349(a)(5)) in first place, and relinquishment by government employment (s. 349(a)(4)(A)) a distant third.

Note: Renunciation is the only relinquishing act that takes place at a US consulate/embassy. For other relinquishing acts, to get official proof from the US govt (the Certificate of Loss of Nationality), you still have to go to a US consulate/embassy to provide proof of the relinquishing act and sign forms in the presence of a consulate officer.
 

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@ Wattevah,

I just realised I may have gone into a bunch of details that are irrelevant, as it just hit me, upon re-reading your comment, I’m not sure if you were asking your question because you’re thinking of relinquishing your US citizenship -- or because you want to be sure to keep your US citizenship when you become an Australian citizen.

If you wish to remain American, that’s a piece of cake. Due to the administrative presumption, you don’t have to do anything – you’ll retain it automatically.
 

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If the friend above can keep two nationality US and AU, can he pay different local tax for his local income ? (for example, the income he has from his house rented in the US and a salary earned in Australia?) That would be great because Australia tax is really high....
 

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I'm not sure what you mean. Generally one's citizenships have no impact on taxation. Here are a couple categories of exceptions:

1. In rare cases a tax treaty will produce varying outcomes depending on citizenship status. For example, the U.S.-Italy tax treaty specifies that residents of Italy who are receiving U.S. Social Security are taxed only by the U.S. on those benefits unless they are individuals who have both U.S. and Italian citizenship. In that case, Italy gets to the tax the benefits. (Which is probably a negative for the affected individuals, actually, but that's what the tax treaty says.)

2. U.S. citizenship (along with Hungarian, Eritrean, and a few others in narrow circumstances) have some citizenship-based tax provisions. For example, U.S. citizens who are residents of Australia might have to pay some U.S. tax on certain Australian income, particularly at higher income levels, provided the Australian tax rate on that income is lower than the U.S. rate. This doesn't happen very often (and for very much tax, at least in percentage terms) among U.S. citizens resident in Australia since, as you point out, Australian tax rates are generally comparatively high. Here in Singapore, as another example, I pay a non-trivial amount of U.S. tax on some non-U.S. source income since I am a U.S. citizen, live in a comparatively lower tax jurisdiction, and have a significant enough amount of income (and type of income) that the U.S. taxes.

3. Some de facto residents of the United Kingdom and Ireland can qualify for so-called "non-dom" tax status, a big tax break, especially for the affluent. Possession of another citizenship is at least helpful in qualifying for that particular tax status though not necessarily required.
 

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If the friend above can keep two nationality US and AU, can he pay different local tax for his local income ? (for example, the income he has from his house rented in the US and a salary earned in Australia?) That would be great because Australia tax is really high....
Actually, no. Generally speaking, you pay taxes in the country where you are "tax resident" except for most taxes related to "real property" (i.e. land and buildings) which are (normally) paid to the jurisdiction where the property is located.

The US is a bit of a different situation, due to the tax obligation imposed on all US citizens regardless of where they reside. This applies, however, only to Federal Income tax. If the friend in the example has a house he is renting out in the US, he'll be subject to all the local property-related taxes, plus have to report and possibly pay income tax on the income from the property rental in the US.

If said friend is, as you say, earning money from a job in Australia, then it would seem that he is "tax resident" in Oz and subject to their full income tax regime there. (Not sure how Australia considers foreign property rentals in the tax system - but if they require reporting of worldwide income, then that's where the fun starts.)
Cheers,
Bev
 

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Discussion Starter · #9 ·
Thanks for the info, guys.

Just wondering, what would be someone's reasons for renouncing their U.S. citizenship?
 

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To be perfectly honest about it, most of the traffic in renouncing US citizenship is based on getting rid of the tax filing requirement. US citizens must file US income taxes no matter where they live in the world. While yes, there are ways to avoid double taxation, some of the reporting requirements become downright onerous for some forms of overseas savings or investment accounts held by US nationals.

Some renunciations are driven by the need to renounce in order to voluntarily take certain nationalities. For those countries that do not permit dual nationality, it may be necessary to submit a certificate of renunciation in order to finalize your naturalization.
Cheers,
Bev
 
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