Important factors to consider in residence planning
Published Saturday, July 31, 2015
The number of Americans giving up their citizenship declined to 460 in the second quarter, the lowest in more than two years, according to Treasury Department data.
Expatriations in the three months through June fell from a record 1,335 in the first quarter, Treasury data compiled by Bloomberg show. The first-half total of 1,795 was just below the record of 1,809 set in 2013 for that period.
The introduction in July 2014 of tougher asset-disclosure rules saw a record number of the estimated 6 million Americans living overseas to give up their passports last year. The U.S. is the only Organization for Economic Cooperation and Development nation that taxes citizens wherever they reside.
The U.S. increased efforts to catch tax cheats after UBS Group AG paid a $780 million penalty in 2009 and handed over data on about 4,700 accounts held by American clients. Shunned by Swiss and German banks and facing the introduction of the Foreign Account Tax Compliance Act, thousands of Americans, including Facebook Inc. co-founder Eduardo Saverin, have given up their passports over the past six years.
Fatca requires U.S. financial institutions to impose a 30 percent withholding tax on payments made to foreign banks that don’t agree to identify and provide information on U.S. account holders. The law, allowing the U.S. to scoop up data from more than 77,000 institutions and 80 governments about its citizens’ overseas financial activities, is projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation.
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