Number Of US Expats Considering Giving Up Their Citizenship Jumps

Stephen Little

27 October 2014

Nearly three-quarters (73 per cent) of Americans living outside of the US are considering giving up their passports following the implementation of the Foreign Account Tax Compliant Act in July, according to a new survey by .

The findings come as US Federal Register data shows that the number of Americans renouncing US citizenship increased by 39 per cent in the three months to September.

In the global poll conducted in September, deVere Group questioned 416 of its American expatriate clients on renouncing citizenship and found that 73 per cent of respondents had “actively considered it”; “are thinking about it”; or “have explored the options of it.” This is an increase of five percentage points from November 2013.

With that said, 16 per cent said they would not consider relinquishing their US citizenship and 11 per cent did not know.

FATCA came into force on July 1 and requires all financial institutions outside of the US to regularly submit information on financial accounts held by American citizens to the IRS. Those who are not compliant will suffer a 30 per cent withholding tax on income and gross proceeds, as of January 2015.

Nigel Green, founder and chief executive of deVere Group, said the figures were not surprising due to the “onerous, burdensome and expensive” reporting requirements of FATCA.

“Also many non-US banks and other financial institutions will no longer work with Americans which can make living outside the US achingly complicated,” said Green.

Green urged Americans abroad affected by FATCA to explore all the available options to them to mitigate the tax law’s effects with an independent financial advisor with cross-border experience before renouncing their citizenship.

“This is especially important as there are certain established federal regulations aimed at discouraging Americans from renouncing their citizenship for tax reasons,” said Green.

“There are now many vehicles that US expatriates can use to significantly reduce the impact of FATCA, including supplementary overseas pension plans,” he added.

There are an estimated 7.6 million Americans living overseas.