As reported in the Wall street Journal last week, figures show the number of US citizens renouncing their citizenship is on the rise.
Renunciation of citizenship or permanent resident status must be given careful consideration as there are some nasty tax consequences that may apply if careful planning and advice is not taken in advance.
An individual is a permanent resident of the US if they have held a US green card for 8 out of the last 15 years.
The US will impose an exit tax on certain US citizens and permanent residents who have a net worth in excess of $2 million OR are not compliant with their US tax obligations. Citizens and holders of US green cards alike, are required to file US tax returns on an annual basis, regardless of where they reside.
There are some exceptions to the exit tax, mostly commonly for certain individuals who are born dual citizens. If you are thinking about renouncing your US citizenship or permanent resident status or would just like to get up to date on your taxes please contact us.