Renouncing Citizenship

[Captain Oates 911]

I am planning to apply for US Citizenship next year and just collecting data about it.

I know that the US is one of the very few countries in the world who require their citizens to pay tax if they are non resident. For instance, I don't pay UK tax on my UK income as I am LPR in the US.

I know that many people make their money in the US and then go back to their original countries as USC's and then renounce citizenship in order to get the IRS off their backs.

If I ever end up back in the UK as a USC, I would probably want to do that if I was going to be there permanently. Annual tax returns are a major bind and I would be paying UK tax again and doing double tax relief which is limited

ok the question is this :

If sometime in the dim and distant future, I were to renounce US Citizenship, would I be banned from visiting the US on the visa waiver program with my UK passport ?

[lucyrich 20]

INA 212 a 1 E: Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable

So it's not just the visa waiver program, but if they determined you renounced citizenship for tax purposes you'd be inadmissible no matter how you tried to enter. I don't know exactly how they determine whether your citizenship renunciation was for tax purposes, nor do I know what enforcement means they use.

[Captain Oates 911]

INA 212 a 1 E: Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable

So it's not just the visa waiver program, but if they determined you renounced citizenship for tax purposes you'd be inadmissible no matter how you tried to enter. I don't know exactly how they determine whether your citizenship renunciation was for tax purposes, nor do I know what enforcement means they use.

Yes that's really interesting - I wonder if it means that if one actually owes taxes and one skips off then one can't come back, and if one is up to date with taxes then it's ok...

I wonder if they ask the reason on the renunciation form - a bit like a survey - if so then something like 'I can't stand President Palin and I don't feel at one with my fellow citizens' would be a the best answer.

Seems like a murky subject. I bet there is a lot to it.

Edited December 7, 2009 by saywhat

[elishav 0]

INA 212 a 1 E: Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable

So it's not just the visa waiver program, but if they determined you renounced citizenship for tax purposes you'd be inadmissible no matter how you tried to enter. I don't know exactly how they determine whether your citizenship renunciation was for tax purposes, nor do I know what enforcement means they use.

I would like to take a stab at this though I am not speaking from experience.

I could be mistaken, but I read that particular passage to mean someone who renounces their citizenship in order to avoid tax debt.

The official website for renunciation actually makes mention of the use of the Visa Waiver Program (VWP) after reununciation. I put in the quote below. So should you decide to cut and run from the United States, there is no official barrier against your entering the US under the VWP.

This is in section D under Dual Nationality/Statelessness "Even if they were not stateless, they would still be required to obtain a visa to travel to the United States, or show that they are eligible for admission pursuant to the terms of the Visa Waiver Pilot Program (VWPP). If found ineligible for a visa or the VWPP to come to the U.S., a renunciant, under certain circumstances, could be barred from entering the United States"

http://travel.state.gov/law/citizenship/citizenship_776.html

Interestingly enough, your renunciation also does not have an effect on your military service obligations. Does that mean that the selective service can enlist you into the US armed forces even though you are no longer a citizen? Oh, the wording on these things.

[Captain Oates 911]

Here are the statistics of those who renounced their US Citizenship and moved to Canada according to a survey conducted by the Academy of Canadian Studies.

The year 2000 was 5,828. The year 2005 was 9,262. The year 2006 was 10,942.

The same studies reveal a decrease in Canadians moving to the USA.

REFERENCE:

http://www.oilempire.us/canada.html

Edited December 8, 2009 by saywhat

[Captain Oates 911]

INA 212 a 1 E: Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable

So it's not just the visa waiver program, but if they determined you renounced citizenship for tax purposes you'd be inadmissible no matter how you tried to enter. I don't know exactly how they determine whether your citizenship renunciation was for tax purposes, nor do I know what enforcement means they use.

I would like to take a stab at this though I am not speaking from experience.

I could be mistaken, but I read that particular passage to mean someone who renounces their citizenship in order to avoid tax debt.

The official website for renunciation actually makes mention of the use of the Visa Waiver Program (VWP) after reununciation. I put in the quote below. So should you decide to cut and run from the United States, there is no official barrier against your entering the US under the VWP.

This is in section D under Dual Nationality/Statelessness "Even if they were not stateless, they would still be required to obtain a visa to travel to the United States, or show that they are eligible for admission pursuant to the terms of the Visa Waiver Pilot Program (VWPP). If found ineligible for a visa or the VWPP to come to the U.S., a renunciant, under certain circumstances, could be barred from entering the United States"

http://travel.state.gov/law/citizenship/citizenship_776.html

Interestingly enough, your renunciation also does not have an effect on your military service obligations. Does that mean that the selective service can enlist you into the US armed forces even though you are no longer a citizen? Oh, the wording on these things.

Wow that's what I was looking for.

It looks like a Brit would just be put back in his original VWP position as long as he isn't a big earner or has millions in assets in which case he is taxable for 10 years after

As I am over military age (and too old to vacuum too I tell my wife), I would be clear on that front.

One more problem solved and it isn't un-windable. Many thanks for that.

That's good stuff

[elishav 0]

Here are the statistics of those who renounced their US Citizenship and moved to Canada according to a survey conducted by the Academy of Canadian Studies.

The year 2000 was 5,828. The year 2005 was 9,262. The year 2006 was 10,942.

The same studies reveal a decrease in Canadians moving to the USA.

REFERENCE:

http://www.oilempire.us/canada.html

[/quote/]

I was rather disappointed when I took the citizenship test on the Canadian Immigration Website and found it's rather difficult to move to Canada, or as Homer Simpson calls it, "America Junior". I assumed they would be more welcoming than the US. However, I think the rules are more stringent in light of the current economic climate.

[Brother Hesekiel 2,236]

First of all, define what you understand as "permanent." I know you can't even step in the same river twice, so when somebody as intelligent as you states a permanent move, I'm confused.

You don't like the idea of a President Palin, and I'm sure you will share this sentiment with about 150,000,000 Americans, probably 100% Democrats--with the single exception of Joe Lieberman--and a few Republicans as well. Would renouncing one's citizenship be the right thing to express one's feelings? Wouldn't voting be a better way to do that to begin with? And what if the unthinkable happens and the country goes through 4 years of unspeakable hell, will you be afterward, in the phase of recovery and healing, try to become a LPR again?

What if you're in the Kingdom, and some Schmack becomes Prime Minister? Are you then renouncing your UK citizenship as well and move to a non-EU country?

Finally, and please forgive me for being frank, renouncing one's citizenship in my opinion must rank among the most stupid things a human can commit. There's no permanence in life, and there's no way to know who's going to be on the trigger button in a decade or two, the same way there's no way to know how big the pile of sh*t is going to be that hits the fan in a quarter Century.

The best line of defense is having options. Sh*t can happen in the US, and sh*t can happen in the UK. Right now there are more Muslems in England than in Pakistan (and may Allah bless 'em all), so it's anybody's guess when things start to get ugly when and where.

Just food for thought. Peace, mate!

Edited December 8, 2009 by Just Bob

[Captain Oates 911]

First of all, define what you understand as "permanent." I know you can't even step in the same river twice, so when somebody as intelligent as you states a permanent move, I'm confused.

You don't like the idea of a President Palin, and I'm sure you will share this sentiment with about 150,000,000 Americans, probably 100% Democrats--with the single exception of Joe Lieberman--and a few Republicans as well. Would renouncing one's citizenship be the right thing to express one's feelings? Wouldn't voting be a better way to do that to begin with? And what if the unthinkable happens and the country goes through 4 years of unspeakable hell, will you be afterward, in the phase of recovery and healing, try to become a LPR again?

What if you're in the Kingdom, and some Schmack becomes Prime Minister? Are you then renouncing your UK citizenship as well and move to a non-EU country?

Finally, and please forgive me for being frank, renouncing one's citizenship in my opinion must rank among the most stupid things a human can commit. There's no permanence in life, and there's no way to know who's going to be on the trigger button in a decade or two, the same way there's no way to know how big the pile of sh*t is going to be that hits the fan in a quarter Century.

The best line of defense is having options. Sh*t can happen in the US, and sh*t can happen in the UK. Right now there are more Muslems in England than in Pakistan (and may Allah bless 'em all), so it's anybody's guess when things start to get ugly when and where.

Just food for thought. Peace, mate!

Yes I like options...

I am thinking that I might be mid 70's and in a mind to return to the elephant's grave yard to get free health care before I die and don't want the hassle of buying turbo tax in the UK and sending tax returns to the US Embassy in London and having foreign UK tax disallowed which it is at certain limits..

It might be that President Palin has dismantled Medicare in the US as it's a socialist invention that was fought hard against by even moderate conservatives, let alone Mrs Palin.

With no Medicare I would be out of here.

The comment about President Palin was a get out if they asked about tax - I would say it was the Prezzy and not the tax that was the motive. Actually she would be my main reason.

Take your point about the Muslim population as I lived within 6 miles of 150,000 Muslims and many golden domes in the UK.

It was like me and the cowboys round here - as long as I didn't talk politics or religion they were fine but it was people from that very community who carried out 7/7 in London..the UK's biggest terrorist attack ever.

I like the idea of having the run of 2 continents, and doing my taxes might not be much more hassle than going to London to renounce, so it's an option I am bearing in mind rather than planning. Bit like getting married - if divorce was not allowed, how many people would get married. Not me.

So it's nice to know I will still have options. Jeez don't fancy turbo tax when I am 80 - hard enough now.

The 7 July 2005 London bombings, also known as 7/7, were a series of coordinated suicide attacks on London's public transport system during the morning rush hour. The bombings were carried out by four British Muslim men, three of Pakistani descent and one of Jamaican descent who had converted to Islam, all of whom were motivated by Britain's involvement in the Iraq War.[1][2]

At 08:50, three bombs exploded within fifty seconds of each other on three London Underground trains, a fourth exploding an hour later at 09:47 on a double-decker bus in Tavistock Square. The explosions were caused by home-made organic peroxide-based devices, packed into rucksacks and almost certainly detonated by the bombers themselves. 56 people were killed, including the bombers, and about 700 were injured.

[Malrothien 6]

I was rather disappointed when I took the citizenship test on the Canadian Immigration Website and found it's rather difficult to move to Canada, or as Homer Simpson calls it, "America Junior". I assumed they would be more welcoming than the US. However, I think the rules are more stringent in light of the current economic climate.

Canada has strict rules because there are hundreds of thousands of applications - and also because of the socialized health care system.

Anyway, OP, if you make under $85000 USD, you do not need to worry about double taxation as the US and the UK have a double taxation treaty.

http://www.hmrc.gov.uk/cnr/dtdigest.pdf

[Captain Oates 911]

I was rather disappointed when I took the citizenship test on the Canadian Immigration Website and found it's rather difficult to move to Canada, or as Homer Simpson calls it, "America Junior". I assumed they would be more welcoming than the US. However, I think the rules are more stringent in light of the current economic climate.

Canada has strict rules because there are hundreds of thousands of applications - and also because of the socialized health care system.

Anyway, OP, if you make under $85000 USD, you do not need to worry about double taxation as the US and the UK have a double taxation treaty.

http://www.hmrc.gov.uk/cnr/dtdigest.pdf

My income is pension+interest+capital gains so I would get no exceptions as it's not classed as 'earned' and the double tax relief would be restricted too.

Yes the US is very unusual in tracking it's citizens forever, even if they are non resident, and claiming their income for tax. No escape.

[David Allen 3]

I agree with Just Bob. If you're that keen on keeping your options open and don't want to be obligated to US Taxes - then why would you even apply for US Citizenship at all? As a Brit you're pretty much rubber stamped into this country unless you have a criminal background... about the only thing citizenship will get you is a different labled passport and the right to legally vote. (as opposed to all the ACORN illegal voters).

Odd that you should take the slap at Palin - because if there was any candidate out there who would reverse the oppressive taxes for citizens outside our borders - it would be her.

It doesn't sound to me as though you're really serious about American Citizenship anyway - so probably best to keep what you've got.

-David

First of all, define what you understand as "permanent." I know you can't even step in the same river twice, so when somebody as intelligent as you states a permanent move, I'm confused.

You don't like the idea of a President Palin, and I'm sure you will share this sentiment with about 150,000,000 Americans, probably 100% Democrats--with the single exception of Joe Lieberman--and a few Republicans as well. Would renouncing one's citizenship be the right thing to express one's feelings? Wouldn't voting be a better way to do that to begin with? And what if the unthinkable happens and the country goes through 4 years of unspeakable hell, will you be afterward, in the phase of recovery and healing, try to become a LPR again?

What if you're in the Kingdom, and some Schmack becomes Prime Minister? Are you then renouncing your UK citizenship as well and move to a non-EU country?

Finally, and please forgive me for being frank, renouncing one's citizenship in my opinion must rank among the most stupid things a human can commit. There's no permanence in life, and there's no way to know who's going to be on the trigger button in a decade or two, the same way there's no way to know how big the pile of sh*t is going to be that hits the fan in a quarter Century.

The best line of defense is having options. Sh*t can happen in the US, and sh*t can happen in the UK. Right now there are more Muslems in England than in Pakistan (and may Allah bless 'em all), so it's anybody's guess when things start to get ugly when and where.

Just food for thought. Peace, mate!

[sachinky 465]

Why apply for U.S. citizenship at all? It's not going to get you anything more than the right to vote or higher priority immigration benefits. Keep renewing your GC. Hold on to your British citizenship. You can move there when you get old and need subsidized health care.

[Old Dominion 26]

I guess I don't understand anyone who would worry so much about money, to the point of going to another country for tax purposes alone, so long as there is enough to live comfortably on. Families are far more important than taxes. It is hard to comprehend why someone would see as an option, becoming a tax-dodger...but that's just me.

[wexford65 0]

I think the OP is more contemplating a potential future scenario where he might return to the UK and IF he does so then he wants to preclude IRS issues. This is as opposed to moving there purely to avoid US taxes.

As for why people do things, remember we are all different and have vastly different situations so there is, as long as legal, rarely a right and wrong. Tax avoidance is legal and undertaken by thousands of people annually. Tax evasion is a different matter.

If someone elects to live as a USC and pay the IRS that is fine. If instead they elect to move abroad and renounce citizenship then surely that is also fine.

I myself spent time looking at the tax ramifications of both living in the US and becoming a USC. In the end I opted to stay a UKC but not for tax reasons.

Edited December 8, 2009 by wexford65