<<Really I guess I don't remember the Republicans wiping out entire economic classes here>>
... hang out on this thread and watch ;0)
frissell.com
"...Expatriating? Give up U.S. citizenship? Who in his right mind would give up his U.S. citizenship? Lots of people. You could practically fill a Boeing 747 with well-heeled U.S. citizens who have taken on foreign citizenship rather than submit to what Learned Hand called "enforced exactions" at a level that amounts to virtual confiscation. The exodus may speed up under an Administration that campaigned for office on a tax-the-rich platform. ..."
iht.com
"Taxing matters : Permanent U.S. expatriates can face hefty liabilities
By Barbara Wall International Herald Tribune
Saturday, September 28, 2002
A permanent move overseas can be an effective way of reducing your tax liability and widening investment horizons, but there are traps for the ill-prepared. Pre-expatriation tax advice should always be sought to make the most of planning opportunities in these areas.
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American expatriates especially face difficult decisions if they are moving overseas permanently.
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"The United States is the only country in the world to tax its citizens on a worldwide basis, irrespective of whether they spend time in the country or whether they have assets there," said Philip Marcovici, a Zurich-based lawyer with international law firm Baker and Mackenzie.
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"To escape the U.S. tax net, American expatriates would have to give up their citizenship," he added. A difficult decision that could backfire if it has not been thought through properly.
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Under current expatriation law, there are wealth thresholds based on net worth which lead to a presumption that a person giving up U.S. citizenship is doing so for tax reasons.
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Individuals who have given up their citizenship and who have earned $100,000 in any one of the 10 years before expatriation, or who have a net worth exceeding $500,000, would automatically be deemed a so-called "taxpatriate." Those persons would be subject to ordinary income tax on U.S. source income for 10 years. They would also be subject to U.S. estate and gift tax during the 10-year period.
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"Potential expatriates who meet one of the wealth thresholds could apply to the Internal Revenue Service for a special dispensation," suggested David Treitel, a tax adviser with the London-based accountancy firm Buzzacott Livingstone. "Around 50 percent of appeals are successful." A ruling must be sought from the IRS within one year of leaving the United States.
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"It may be possible to escape the wealth threshold by reworking assets," said Marcovici. "For example, if an individual exceeds the net worth threshold, but does not exceed the tax liability threshold, he could reduce net worth to a level below $500,000 and expatriate without triggering the presumption that he is escaping the U.S. for tax reasons."
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Although many expatriates who escape the U.S. tax net are advised to move their assets into tax-friendly offshore structures, this advice does not necessarily apply to all investments. "American expatriates who hold shares in U.S. companies are treated like any other foreign investor and are therefore not taxed on capital gains when the shares are sold," Marcovici said.
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Those who are thinking about giving up their citizenship may have to move quickly.
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Under the current regime, the U.S. government has to prove that potential expatriates are leaving the country for tax reasons. Last month, Congress proposed a new exit tax on all citizens who give up their U.S. status. If the proposal becomes law, individuals will be taxed as if they had either sold everything or died. This would give rise to immediate exposure to capital gains tax. [EDIT: this law passed]
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There are limited tax planning strategies for Americans who retain their citizenship. "Those who have a foreign spouse may wish to take advantage of the U.S. foreign gift tax allowance," said Treitel. "Individuals are allowed to give up to $110,000 in any one tax year to a non-U.S. domiciled spouse."
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Marcovici added: "There may be modest benefits if assets are transferred out of the United States into tax-efficient structures in the new country, but the expatriate could also face more severe tax reporting requirements than if the assets were left in the United States."
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a financial adviser with Chase de Vere Investments PLC in London. "To avoid double taxation on company or private pensions, expatriates would need to get hold of a declaration from the relevant tax authority that they are resident
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Barbara Wall is a free-lance journalist based in Britain."
debito.org
"must pay an "exit tax" (a tax on their projected earnings over the next ten or so years--see "Learning, and Earning, Their Stripes", Washington Post, November 17, 1996, Page C3, archived for a fee at washingtonpost.com). Those who de-Americanize get their names listed in the Congressional Register. Those who abscond from the IRS are never let back into the US again." |
