Renouncing US Citizenship

[DJClaire 139]

On 2/13/2025 at 4:32 PM, Liam2021 said:

Not sure why since US and England both allow dual citizenship. Just remember, when you give up the citizenship, you can't take it back.

This is not technically true.

 

We do not have any intention of ever returning to the US, however, if we had to for some reason there is nothing legally stopping us from going through the immigration process again. 

[DJClaire 139]

On 2/13/2025 at 4:57 PM, jostermacedo said:

Even visiting the US will be a challenge. In theory the former US Citizen can apply and get a B1/B2 visa, but it won't be an easy task to get one approved.

As far as my research shows there is no issue visiting the US after renouncing. You apply for the same ESTA waiver as far as I am aware and can visit for 90 days. Legally I believe you can also reapply for the green card if your circumstances meet the criteria, but as I said, we have no intention or desire to return. I am just weighing up the pro and cons for my little family and renouncing could be the easier option.

[DJClaire 139]

On 2/13/2025 at 6:35 PM, garebear397 said:

As a US citizen that has lived significant time overseas, if the main reason is tax related, you should really think hard about it. While it is annoying filing taxes, you can exclude or credit (1:1 based on income tax paid to other countries) quite a bit if not all of any US tax burden. Like others have pointed out the benefit really may not be worth the cost, which could be not being able to even visit the US, let alone live in the US again. 

 

If its for other ideological / political reasons, same thing...think long and hard about your decision. There is nothing stopping you from moving, settling in for a several years, and if you still feel strongly about it you can proceed. 

 

Hi Garebear, thanks for your comment. It is most definitely a hard decision but the filing of taxes is not a real issue as my American spouse will have to file anyway, it is the other IRS obligations placed on overseas residents that are causing me a headache. I am trying to navigate three taxation systems and it is a heavy burden. My legal research so far shows no blocks to visiting the US or even reapplying if for some wild reason we wanted to return. Can you guide me in your research that says different as that would be a major consideration as we would like to visit friends every couple of years.

[DJClaire 139]

On 2/13/2025 at 8:39 PM, jostermacedo said:

And if someone renounces US Citizenship to avoid taxation, they become inadimissible.

(E) Former citizens who renounced citizenship to avoid taxation

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 inadmissible.

 

https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title8-section1182&num=0&edition=prelim

 

 

Hi, Thanks for this. We are definitely not avoiding taxation. We have filed with no issue since moving overseas. The double taxation treaty has meant we owe nothing in the US, we simply pay taxes where we reside. My issue is the impact being a US Citizen has on my access to a British bank account for example and how to navigate and file in three countries at once. 

[DJClaire 139]

On 2/13/2025 at 9:35 PM, OldUser said:

Agreed, policits can change over the time, especially if OP has several decades of life ahead.

 

Without more context from OP, the decision to renounce looks rushed, especially if only became a citizen few years ago.

 

Of course, it's solely OP's decision, I was only hoping to inform OP about various aspects of renunciation.

 

@nastra30 and @jostermacedo shared great resources to study.

 

@DJClaire if you end up renouncing, please post your experience here. It may help somebody else in your shoes. VJ community has limited knowledge when it comes to this process.

 

 

 

Absolutely, thank you. You have been super helpful in helping me draw up a pro's and con's list essentially. I do not want to make a rushed decision and I would definitely not make it based on political grounds (four years I am sure will fly by!). The issue is the burden of being a US Citizen overseas is heavy at times, and when you throw in a third countries tax regime into the mix it is enough to make your head spin. If I do go ahead I will be sure to share my experience to help other VJ users 🙂 

[jostermacedo 62]

1 hour ago, DJClaire said:

As far as my research shows there is no issue visiting the US after renouncing. You apply for the same ESTA waiver as far as I am aware and can visit for 90 days. Legally I believe you can also reapply for the green card if your circumstances meet the criteria, but as I said, we have no intention or desire to return. I am just weighing up the pro and cons for my little family and renouncing could be the easier option.

That is not what I heard. After renouncing US Citizenship, getting a visa (or an ESTA) won't be straightforward. Of course it's possible, but it will be something the consular office will analyze carefully.

 

On your motive, i.e. the issue with the UK banks,: can't you find a small bank in the UK that does not ask the question if you're an US person? Of course you would have to continue to prepare your US tax return and the FBAR and report any international bank accounts, but it would make your life easier with the local bank.

[DJClaire 139]

9 minutes ago, jostermacedo said:

That is not what I heard. After renouncing US Citizenship, getting a visa (or an ESTA) won't be straightforward. Of course it's possible, but it will be something the consular office will analyze carefully.

 

On your motive, i.e. the issue with the UK banks,: can't you find a small bank in the UK that does not ask the question if you're an US person? Of course you would have to continue to prepare your US tax return and the FBAR and report any international bank accounts, but it would make your life easier with the local bank.

I will definitely double-check regarding the future ESTA. I am afraid every bank in the UK is meant to ask about personal information and citizenship regularly so I am not sure there is any way to avoid it. Interestingly, my banks only started contacting me 3 months after oath so they clearly communicate often. I could o of course use something like Wise or Revolut but I actually use my UK banks more than anything else, even living overseas so to lose them would be a blow.

[jostermacedo 62]

9 minutes ago, DJClaire said:

I will definitely double-check regarding the future ESTA. I am afraid every bank in the UK is meant to ask about personal information and citizenship regularly so I am not sure there is any way to avoid it. Interestingly, my banks only started contacting me 3 months after oath so they clearly communicate often. I could o of course use something like Wise or Revolut but I actually use my UK banks more than anything else, even living overseas so to lose them would be a blow.

Check HSBC. I worked with them in Brazil and I work with them in the US. They advertise international services a lot, so they might be a good choice for an US expat living in the UK.

[garebear397 84]

5 minutes ago, DJClaire said:

I will definitely double-check regarding the future ESTA. I am afraid every bank in the UK is meant to ask about personal information and citizenship regularly so I am not sure there is any way to avoid it. Interestingly, my banks only started contacting me 3 months after oath so they clearly communicate often. I could o of course use something like Wise or Revolut but I actually use my UK banks more than anything else, even living overseas so to lose them would be a blow.

Again really just to understand -- but are the UK banks having an issue about your US citizenship? I can't imagine dual UK / US citizens is that rare. I mean yeah you have to file FBARs and such, but again its more of an annoyance than an actual problem. Not even trying to continue to question your decision, you have received lots of opinions and will have to do whatever is best for you all -- just trying to understand how other countries treat it. 

 

 

1 hour ago, DJClaire said:

 

Hi Garebear, thanks for your comment. It is most definitely a hard decision but the filing of taxes is not a real issue as my American spouse will have to file anyway, it is the other IRS obligations placed on overseas residents that are causing me a headache. I am trying to navigate three taxation systems and it is a heavy burden. My legal research so far shows no blocks to visiting the US or even reapplying if for some wild reason we wanted to return. Can you guide me in your research that says different as that would be a major consideration as we would like to visit friends every couple of years.

I haven't necessarily done extensive research, but there is no law that says previous US citizens can't visit or live again in the US -- you are correct. But visas are not a "right", so there doesn't need to be a law that prohibits it, if the CO has reasonable suspicion they can just deny. ESTA asks about previous citizenship, which means you might get an automatic rejection (since they will want to know more information about why you used to be a US citizen), and then if you have to go to B2 route, you obviously have increased suspicion of trying to immigrate to the US, since you have done it before. Not to say you will get denied, but it is an increased risk. And then if you try to move back to the US, they will definitely question what happened -- and they might have suspicion that you did it for tax reasons (even if that wasn't the main motivator). 

 

 

[DJClaire 139]

39 minutes ago, jostermacedo said:

Check HSBC. I worked with them in Brazil and I work with them in the US. They advertise international services a lot, so they might be a good choice for an US expat living in the UK.

Interesting. Thanks for that suggestion. I will take a look and see how high their minimum balances are for non-residents. 

[jostermacedo 62]

37 minutes ago, DJClaire said:

Interesting. Thanks for that suggestion. I will take a look and see how high their minimum balances are for non-residents. 

They offer services for US Expats in the UK:

 

 

Link: 

 

https://www.expat.hsbc.com/international-services/us-expats/

 

[DJClaire 139]

42 minutes ago, jostermacedo said:

They offer services for US Expats in the UK:

 

 

Link: 

 

https://www.expat.hsbc.com/international-services/us-expats/

 

I will definitely take a look and see if they support Brit/Americans in Spain too. Thank you

[DJClaire 139]

1 hour ago, garebear397 said:

Again really just to understand -- but are the UK banks having an issue about your US citizenship? I can't imagine dual UK / US citizens is that rare. I mean yeah you have to file FBARs and such, but again its more of an annoyance than an actual problem. Not even trying to continue to question your decision, you have received lots of opinions and will have to do whatever is best for you all -- just trying to understand how other countries treat it. 

 

 

I haven't necessarily done extensive research, but there is no law that says previous US citizens can't visit or live again in the US -- you are correct. But visas are not a "right", so there doesn't need to be a law that prohibits it, if the CO has reasonable suspicion they can just deny. ESTA asks about previous citizenship, which means you might get an automatic rejection (since they will want to know more information about why you used to be a US citizen), and then if you have to go to B2 route, you obviously have increased suspicion of trying to immigrate to the US, since you have done it before. Not to say you will get denied, but it is an increased risk. And then if you try to move back to the US, they will definitely question what happened -- and they might have suspicion that you did it for tax reasons (even if that wasn't the main motivator). 

 

 

 

Yes, it is a real problem for many dual nationals. The British banks do not find US resident customers attractive, due to the huge reporting requirements placed on them by the IRS. They often look at these accounts as a problem for not very much return. 

 

As for the taxation, there is no problem filing but the extra layer of form filling required can be a headache as I am not in the UK, so I have to navigate THREE tax systems (two taxing worldwide income) and THREE different filing and payment dates. So far I have managed it perfectly and never been late or missed anything however it is A LOT. Then when you add in the extra dimension that inheritance tax might create for me in a few years, it feels overwhelming. The key issue is America is one of only TWO countries in the WORLD that demand citizens file taxes regardless of where they live. It is a royal pain. We never owe anything to the US as the taxation is higher in Spain, but still, it costs us a fortune in time and money to remain compliant. 

 

As for visas and future entry I will definitely take legal guidance on that. Though I never want to live there again (and could likely never afford to again what with housing and healthcare costs) I would like the ability to holiday there. I will take some advice and try and best weigh up the pros and cons. Thanks so much for y our help and input, I really appreciate it. 

[OldUser 7,890]

3 hours ago, DJClaire said:

I am trying to navigate three taxation systems and it is a heavy burden. 

Silly question. How is UK taxation system related to your life in Spain? If you live in Spain full time, you're not a UK resident for tax purposes and don't owe any taxes there? 

 

And in this case, why do you need to bank in the UK, wouldn't be easier to bank locally?

 

 

 

[OldUser 7,890]

3 hours ago, DJClaire said:

Yes, it is a big decision and an expensive one since the renouncing fee has been hiked from $450 to $2350.

 

3 hours ago, DJClaire said:

Thanks for this. I will check out the channel. Thankfully I believe I would not be liable for exit tax as I am below the threshold, but I will explore thoroughly before applying. 

 

 

You can safely ignore Andrew's channel. He's catering for multimillionaires (10M+). Typically this is when taxation becomes a real issue. 

 

I was thinking maybe that's why you're seeking to renounce.