FATCA ‘Tempting US Expats to Renounce Citizenship’
Two in three Americans living abroad are tempted to renounce their US citizenship in response to the Foreign Account Tax Compliance Act (FATCA), according to a survey by deVere Group.
The independent financial advisory organization polled 414 of its American expatriate clients in September and October and asked: ‘Would you consider voluntarily relinquishing your US citizenship due to the impact of FATCA?’
Cumulatively, 68% of respondents answered that they had ‘actively considered it’, ‘are thinking about it,’ or ‘have explored the options of it’, while 17% said they would not consider relinquishing their US citizenship and 15% did not know.
“Purportedly designed as a tool to counteract tax evasion, FATCA has resulted in additional reporting requirements for all US citizens overseas,” the group commented. “It will also mean substantial compliance obligations for all non-US financial institutions [FIs] worldwide. FATCA critics insist that it will do little, if anything, to curb the serious issue of tax evasion.”
The group’s founder and chief executive (CEO), Nigel Green
, added: “This is a remarkably high figure. However, I am not too surprised as it is our experience that Americans – at home and abroad – are becoming increasingly aware of the far-reaching, unintended adverse affects of FATCA.
“More and more of our internationally-based American clients are now telling us, usually with a heavy heart, that they would be tempted to give-up their US citizenship to avoid what they feel is the unfair, complex and oppressive burden of FATCA.
“FATCA is a huge imposition on ordinary Americans who happen to live and/or work outside the US and will involve significantly more expensive and laborious reporting requirements. In addition, due to the onerous and costly impact of FATCA, many non-US FIs will no longer work with Americans – even if they have been clients for decades – which can make life outside the US ‘challenging’ to say the least.”
“As the July 1 2014 FATCA roll-out approaches, and the full scope of the legislation becomes ever more evident, I fully expect a growing number of American clients to report that they would consider renouncing their citizenship of the United States. It’s not a decision they will take lightly but one on which many more, I suspect, will take decisive action.”
The group adds that Green’s forecasts are supported by official statistics. The number of American expatriates relinquishing their US citizenship surged in Q2 of 2013, to 1,131 cases, compared with 189 in the same period in 2012.
Interest in this strategy, says Green, is “likely to have skyrocketed” since it was revealed that the co-founder of Facebook, Eduardo Saverin, renounced his US citizenship to become a resident of Singapore, and that American icon Tina Turner has become a Swiss citizen.