




Renunciation of U.S. Citizenship (Expatriation) and the Exit Tax
The considerations in giving up a U.S. passport are many. There are the practicalities of traveling to the U.S. afterward, and how the IRS will view you. But there are also the emotional considerations of how you and your family may feel once it is over.
​
The process for relinquishing your U.S. citizenship takes anywhere from 3 months to over a year, depending upon which U.S. Embassy or Consulate you apply through. All locations require you to provide proof that you have citizenship from a second country - they will not approve your application if doing so would make you stateless. All locations charge the same application fee, which currently stands at $2,350 USD, and all locations require you to attend an in-person appointment to formally renounce. However, each location varies a little in the process they require you to go through.
In the UK, London and Belfast are the 2 locations where you can expatriate. They both require only one interview. The downside of staying in the UK to do this is that both of these locations currently have very long wait times. There are many U.S. Embassies and Consulates around the world, however, and a good number of these will agree to accommodate your request for an appointment, even if you do not live locally. Malta, for example, will accept UK-resident individuals for these appointments, and currently the wait for an appointment hovers around 3 months from the initial contact.
The in-person interview itself, wherever it takes place, takes a serious tone. The Consular Officer will inspect your documents and they will form an impression of you to be sure that you understand the consequences of what you are doing, so you must be well prepared. You then swear or make a formal affirmation, and sign some forms. You must leave your U.S. passport with them when you go. Your file is forwarded to a central U.S. location for review and final approval over the following few months, but your Certificate of Loss of Nationality will be backdated to the date of your interview. Tax liability ends from this date.
To give you an idea of how the Expatriation Tax works, on your last U.S. tax return, the IRS more or less views your assets as if they had been sold for their fair market value on the day before the expatriation date, and they are taxed accordingly. It is more complex than this, so you should consult with a qualified U.S. tax advisor about how it will apply to your individual situation before making any decisions- but this should give you a general idea of how it goes.
​
DEE AR Ltd. is experienced in helping Americans give up their citizenship, and treats the matter with the sensitivity it deserves. Please feel free to phone or submit an inquiry to have your questions answered.
