FAWCO urges its members who are considering renunciation of U.S. citizenship to become fully informed by contacting tax professionals and immigration attorneys so as to make the best choice for your individual circumstances.
Renunciation of United States citizenship is an extremely individual and particular personal choice. First and foremost, it is permanent and irrevocable. Further, some renunciation considerations are inheritance for one’s heirs (both U.S. and non-U.S. citizens), immigration consequences, possession of property in the U.S., possible exit taxes, the inability to repatriate to the United States in the future and/or possibly rendering oneself “stateless”, i.e. a person without a nationality.
In light of the reporting obligations under the Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank Account Report (FBAR), U.S. citizenship renunciation may be viewed as a tax avoidance and privacy measure, and yet may not absolve everyone of continuing U.S. tax considerations/obligations – such as how much time they plan to be in the U.S. even though they are no longer U.S. citizens, taxation of retirement benefits accrued while still a U.S. citizen, etc.
Each case is distinct, so again, it is necessary to become fully informed and weigh the pros and cons when considering this life altering decision.
For State Department information see –
http://travel.state.gov/law/citizenship/citizenship_776.html
For information regarding possible exit taxes upon expatriation see –
http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-