31/01/17

Trump and Taxes Pushing Americans to Move Abroad and Renounce Citizenship.

(iExpat)-- The new American President Donald Trump has been ruffling feathers during his first few days in office and there have been concerns that his policies could lead to more Americans deciding to move abroad, reports iExpat.com

But it will be what Trump does with taxes that could be the deciding factors for potential expats, many of whom dream of living a more cost effective life abroad.

Donald TrumpRecent research suggests that while 1,380 Americans gave up their citizenship in three months leading up to the US election, a 172% increase on the previous quarter, more are set to do so.

Indeed, Americans are abandoning their citizenship at the second fastest rate in history. Every three months the US Government publishes the names of all Americans who give up their citizenship. The latest list, published days after the presidential election, had 63 times more names on it than the one issued as Barack Obama won his first term in the White House in 2008.

Waiting time for US expats wanting to surrender their passports at the American Embassy in London has risen from one to six months and what Trump has said on taxes is credited with making more people think not only of moving abroad but taking citizenship if their adopted country.

According to Bambridge Accountants, which specialises in handling the tax affairs of US citizens living in Britain, it has seen a spike in demand from Americans keen to renounce their citizenship. During the first nine months of 2016, it typically received just one such enquiry a week. But in October that increased to one a day and rose again when Trump won.

While the UK is home to an estimated 200,000 US expats, the trend is a global one. In the third quarter of 2016 some 1,380 Americans around the world renounced their US citizenship, a 172% increase on the preceding three months.

‘Americans tend to be patriotic people, for whom cutting ties with their homeland is a drastic and often highly emotional step. So the surge in US expats renouncing their citizenship speaks volumes about how strongly many of them feel about two things; Trump and taxes,’ said Alistair Bambridge, a senior partner at the London based firm.

‘Donald Trump’s election accelerated an existing trend of Americans renouncing their citizenship to avoid intrusive new tax rules. The reach of Uncle Sam is famously long, and US citizens must complete a US tax return every year wherever they are in the world as well as declaring any money they, their spouse or their children hold in a foreign bank account. Failure to do so can result in a $10,000 fine,’ he pointed out.

‘Such draconian rules were introduced to stop tax evasion, but for Americans who have made their home overseas they have become an expensive and unpleasant burden. Surrendering their coveted blue passports was once all but unthinkable, but for increasing numbers of US expats this has become the least painful option,’ he added.