6 ms·

The "problem" you describe is your US citizenship requires you to pay tax on earnings from outside the US - that's a condition of US citizenship. If you don't

The "problem" you describe is your US citizenship requires you to pay tax on earnings from outside the US - that's a condition of US citizenship. If you don't want to pay those taxes, then renounce your US citizenship once you have, say, gained UK citizenship, if that works for you. A famous bloke once said (probably in Hebrew, written up in Aramaic or Greek and badly translated into middle, modern and somewhat strange English): "Pay unto Caesar, that which is due to Caesar and pay unto God that which is due to God" or words to that effect. Substitute IRS for God and you have a suitably cynical aside! If your firm over here is good enough and you are reasonably settled then why not go all in? I'm not sure what the rules are on reconnecting with the US if you have formally renounced citizenship. However, I'm sure a birth cert from Yeehaw, TX or wherever will go some way. Even so, UK citizens are generally welcomed in the Land of the Free. An ESTA (great scheme IMO) costs about £20 for two years coverage - more than enough to visit the relos. I know from second hand experience that our bureaucracy is just as convoluted as any other and it will take roughly one to two years (that was about 10 years ago) to get citizenship and probably involves a test that I would fail! You might like to look into where your company is actually registered. A Ltd is not you - it is a separate legal entity and the UK (etc) is quite a complicated setup within quite a complicated environment. You might explore Jersey and the Isle of Man for places to headquarter. Don't overlook Eire either (EU with UK to the north, with special arrangements) Anyway, the snag you have is solely US based and not UK (for a change).

khuey 2y ago
> I'm not sure what the rules are on reconnecting with the US if you have formally renounced citizenship. However, I'm sure a birth cert from Yeehaw, TX or wherever will go some way. It doesn't. Once you've renounced your US citizenship you're on exactly the same footing as any other foreigner in terms of visiting or living here. And that's assuming you're smart enough not to admit to the government that you're renouncing your US citizenship for tax purposes. If you make that mistake, you've made yourself permanently inadmissible to the United States under INA 212(a)(10)(E).
- gerdesj 2y ago
  "And that's assuming you're smart enough not to admit to the government that you're renouncing your US citizenship for tax purposes. If you make that mistake, you've made yourself permanently inadmissible to the United States under INA 212(a)(10)(E)." Blimey, that's a bit harsh! I wonder if Mr Adams and co, when throwing off the yoke of something, something, imperialism and that, and those jolly beastly Britons, would approve of INA 212(a)(10)(E)? That is some legacy for those freedom fighters. cough terrorists (sorry - I'm a Brit, its only been 250 odd years!)
  - deleted 2y ago
    [deleted]
  - aardvark179 2y ago
    It’s a hang over from the civil war I believe.
  - konfusinomicon 2y ago
    hahaha, nothing beats a spoon of redcoat tears in a cup of salty boston tea
  - AStonesThrow 2y ago
    Mr Adams recently wrote about the possibility of spending a year dead for tax purposes.
brandonmenc 2y ago
> The "problem" you describe is your US citizenship requires you to pay tax on earnings from outside the US - that's a condition of US citizenship. imo a feature, not a bug.
- christophilus 2y ago
  How so?
  - brandonmenc 2y ago
    You enjoy benefits as a citizen, even if living abroad. You should pay for those.
    - dantheman 2y ago
      What benefits?
      - cm2012 2y ago
        The rights your passport gives you + the legal and embassy protections given to American citizens. Like the American civilians held in Russia that Biden recently traded Russian spies for. You still have access to vote absentee, as well as collect social security benefits. You can use US bank accounts and other institutions. You and your children have the right to return if you ever desire it.
        latortuga 2y ago
        > You can use US bank accounts and other institutions. Recently found out that this is more and more difficult because most banks are requiring 2FA with a US phone number which is difficult to get if you don't live in the states.
        bongodongobob 2y ago
        It's not any more difficult than buying a phone and calling a carrier to activate it. They'll take a PO Box for a billing address no problem.
telotortium 2y ago
> probably in Hebrew, written up in Aramaic or Greek It is generally agreed upon by scholars that Jesus’ primary language, like in Palestine generally, was Aramaic, not Hebrew, which was already well on its way to becoming a liturgical language (although Jesus probably knew Hebrew well, as he was called “rabbi”, and likely Greek as well): https://en.m.wikipedia.org/wiki/Language_of_Jesus https://en.m.wikipedia.org/wiki/Language_of_Jesus. Certainly for the context of this quote, it’s likely that he was speaking in Aramaic, given that in the chapter he was responding to questions from a variety of local people.
xpl 2y ago
> If you don't want to pay those taxes, then renounce your US citizenship once you have Haven't you heard of exit tax? If you renounce citizenship (or surrender your 8+ year green card), you must pay 30% of your worldwide assets' value (as if you sold it for cash) to the IRS. And if you own something illiquid, you're deep in trouble! So no, people can't renounce their U.S. citizenship easily, the IRS has accounted for that...
- wkat4242 2y ago
  Wow I knew of the tax thing but not this. That's tough.
  - saxonww 2y ago
    It's only if you qualify as a 'covered expatriate' though. I'm not a lawyer or an accountant but a plain reading of the standard suggests the vast majority of Americans would not be covered. https://www.irs.gov/instructions/i8854#en_US_2023_publink100046230 https://www.irs.gov/instructions/i8854#en_US_2023_publink100... I think the key would be how they arrive at the net worth numbers. If it's just a calculation of all your assets as if they were sold at FMV, ~90% of the US is below the net worth threshold. https://dqydj.com/net-worth-percentiles/ https://dqydj.com/net-worth-percentiles/ The average tax liability standard looks like it would take 5 years at $600K+ of adjusted gross income, too. Plenty of people would meet this standard. Most people would not.
    - ithkuil 2y ago
      You're a covered expatriate also if: " You fail to certify on Form 8854 that you have complied with all federal tax obligations for the 5 tax years preceding the date of your expatriation. " I agree you should pay up your taxes but this will not only recover the due taxes but it will take more.
    - xpl 2y ago
      So it basically says if you net worth is over $2 mil, you're need to pay exit tax, right? If a house and 401k also counted towards net worth, it could impact quite a few Americans. Besides, those who expatriate for tax optimization purposes usually have a significant amount of wealth.
gwd 2y ago
> The "problem" you describe is your US citizenship requires you to pay tax on earnings from outside the US No, I think you're missing the issue. Suppose the company (let's call it XYZ Ltd) is owned 100% by my spouse. Let's say XYZ has $XYZPROFIT in one year. It then pays $XYZUKTAX on that profit, but the US isn't involved whatsoever. If it pays me $MYSALARY, XYZ reports that to the UK government and pays $MYUKTAX. I then report the US government $MYSALARY and $MYUKTAX, calculate $MYINCOME, and then calculate $MYUSTAX (which is normally $0, since UK taxes are higher than US taxes). Now let's suppose I own more than 10% but less than 50%. Now I basically have to report to the US the same information about XYZ's financials that the company reports to the UK government, as well as answer 40-60 questions each of which would take a few days to understand the meaning of. Thankfully that's where it ends under normal circumstances; pay an accountant to prove you're not cheating the system and you're done. Now suppose XYZ is 100% owned by me. It has $XYZPROFIT for the year, and pays $XYZUKTAX on that profit. Now, by default, $XYZPROFIT is included in $MYINCOME, but $XYZUKTAX is not included in $MYUKTAX; meaning by default I'm going to be double-taxed. I can avoid this, but only with 1) extra paperwork, and 2) forgoing any tax breaks for start-ups that the UK government has. > "Pay unto Caesar, that which is due to Caesar and pay unto God that which is due to God" or words to that effect. As I said, I don't mind paying taxes, but I don't want to pay it twice.
helsinkiandrew 2y ago
> If you don't want to pay those taxes, then renounce your US citizenship once you have, say, gained UK citizenship, if that works for you. Boris Johnson - the ex UK prime minister - was born in the US, and complained loudly and frequently about having to pay taxes to the US - and appears to have refused to do so atleast partially. Having to pay tax on profits from the sale of his family home (which is tax free in UK) was the trigger to get him to renounce citizenship. https://www.forbes.com/sites/robertwood/2022/07/10/boris-johnsons-big-win-beating-irs https://www.forbes.com/sites/robertwood/2022/07/10/boris-joh...
sidewndr46 2y ago
If you renounce your citizenship to avoid taxes, you are barred from ever entering the US or its territories again. Take one quick look at the EEZ of the US and tell me if you are OK with never traveling through those places again.

khuey 2y ago

> I'm not sure what the rules are on reconnecting with the US if you have formally renounced citizenship. However, I'm sure a birth cert from Yeehaw, TX or wherever will go some way. It doesn't. Once you've renounced your US citizenship you're on exactly the same footing as any other foreigner in terms of visiting or living here. And that's assuming you're smart enough not to admit to the government that you're renouncing your US citizenship for tax purposes. If you make that mistake, you've made yourself permanently inadmissible to the United States under INA 212(a)(10)(E).

gerdesj 2y ago
"And that's assuming you're smart enough not to admit to the government that you're renouncing your US citizenship for tax purposes. If you make that mistake, you've made yourself permanently inadmissible to the United States under INA 212(a)(10)(E)." Blimey, that's a bit harsh! I wonder if Mr Adams and co, when throwing off the yoke of something, something, imperialism and that, and those jolly beastly Britons, would approve of INA 212(a)(10)(E)? That is some legacy for those freedom fighters. cough terrorists (sorry - I'm a Brit, its only been 250 odd years!)
- deleted 2y ago
  [deleted]
- aardvark179 2y ago
  It’s a hang over from the civil war I believe.
- konfusinomicon 2y ago
  hahaha, nothing beats a spoon of redcoat tears in a cup of salty boston tea
- AStonesThrow 2y ago
  Mr Adams recently wrote about the possibility of spending a year dead for tax purposes.

brandonmenc 2y ago

> The "problem" you describe is your US citizenship requires you to pay tax on earnings from outside the US - that's a condition of US citizenship. imo a feature, not a bug.

christophilus 2y ago
How so?
- brandonmenc 2y ago
  You enjoy benefits as a citizen, even if living abroad. You should pay for those.
  - dantheman 2y ago
    What benefits?
    - cm2012 2y ago
      The rights your passport gives you + the legal and embassy protections given to American citizens. Like the American civilians held in Russia that Biden recently traded Russian spies for. You still have access to vote absentee, as well as collect social security benefits. You can use US bank accounts and other institutions. You and your children have the right to return if you ever desire it.
      - latortuga 2y ago
        > You can use US bank accounts and other institutions. Recently found out that this is more and more difficult because most banks are requiring 2FA with a US phone number which is difficult to get if you don't live in the states.
        bongodongobob 2y ago
        It's not any more difficult than buying a phone and calling a carrier to activate it. They'll take a PO Box for a billing address no problem.

telotortium 2y ago

> probably in Hebrew, written up in Aramaic or Greek It is generally agreed upon by scholars that Jesus’ primary language, like in Palestine generally, was Aramaic, not Hebrew, which was already well on its way to becoming a liturgical language (although Jesus probably knew Hebrew well, as he was called “rabbi”, and likely Greek as well): https://en.m.wikipedia.org/wiki/Language_of_Jesus https://en.m.wikipedia.org/wiki/Language_of_Jesus. Certainly for the context of this quote, it’s likely that he was speaking in Aramaic, given that in the chapter he was responding to questions from a variety of local people.

xpl 2y ago

> If you don't want to pay those taxes, then renounce your US citizenship once you have Haven't you heard of exit tax? If you renounce citizenship (or surrender your 8+ year green card), you must pay 30% of your worldwide assets' value (as if you sold it for cash) to the IRS. And if you own something illiquid, you're deep in trouble! So no, people can't renounce their U.S. citizenship easily, the IRS has accounted for that...

wkat4242 2y ago
Wow I knew of the tax thing but not this. That's tough.
- saxonww 2y ago
  It's only if you qualify as a 'covered expatriate' though. I'm not a lawyer or an accountant but a plain reading of the standard suggests the vast majority of Americans would not be covered. https://www.irs.gov/instructions/i8854#en_US_2023_publink100046230 https://www.irs.gov/instructions/i8854#en_US_2023_publink100... I think the key would be how they arrive at the net worth numbers. If it's just a calculation of all your assets as if they were sold at FMV, ~90% of the US is below the net worth threshold. https://dqydj.com/net-worth-percentiles/ https://dqydj.com/net-worth-percentiles/ The average tax liability standard looks like it would take 5 years at $600K+ of adjusted gross income, too. Plenty of people would meet this standard. Most people would not.
  - ithkuil 2y ago
    You're a covered expatriate also if: " You fail to certify on Form 8854 that you have complied with all federal tax obligations for the 5 tax years preceding the date of your expatriation. " I agree you should pay up your taxes but this will not only recover the due taxes but it will take more.
  - xpl 2y ago
    So it basically says if you net worth is over $2 mil, you're need to pay exit tax, right? If a house and 401k also counted towards net worth, it could impact quite a few Americans. Besides, those who expatriate for tax optimization purposes usually have a significant amount of wealth.

gwd 2y ago

> The "problem" you describe is your US citizenship requires you to pay tax on earnings from outside the US No, I think you're missing the issue. Suppose the company (let's call it XYZ Ltd) is owned 100% by my spouse. Let's say XYZ has $XYZPROFIT in one year. It then pays $XYZUKTAX on that profit, but the US isn't involved whatsoever. If it pays me $MYSALARY, XYZ reports that to the UK government and pays $MYUKTAX. I then report the US government $MYSALARY and $MYUKTAX, calculate $MYINCOME, and then calculate $MYUSTAX (which is normally $0, since UK taxes are higher than US taxes). Now let's suppose I own more than 10% but less than 50%. Now I basically have to report to the US the same information about XYZ's financials that the company reports to the UK government, as well as answer 40-60 questions each of which would take a few days to understand the meaning of. Thankfully that's where it ends under normal circumstances; pay an accountant to prove you're not cheating the system and you're done. Now suppose XYZ is 100% owned by me. It has $XYZPROFIT for the year, and pays $XYZUKTAX on that profit. Now, by default, $XYZPROFIT is included in $MYINCOME, but $XYZUKTAX is not included in $MYUKTAX; meaning by default I'm going to be double-taxed. I can avoid this, but only with 1) extra paperwork, and 2) forgoing any tax breaks for start-ups that the UK government has. > "Pay unto Caesar, that which is due to Caesar and pay unto God that which is due to God" or words to that effect. As I said, I don't mind paying taxes, but I don't want to pay it twice.

helsinkiandrew 2y ago

> If you don't want to pay those taxes, then renounce your US citizenship once you have, say, gained UK citizenship, if that works for you. Boris Johnson - the ex UK prime minister - was born in the US, and complained loudly and frequently about having to pay taxes to the US - and appears to have refused to do so atleast partially. Having to pay tax on profits from the sale of his family home (which is tax free in UK) was the trigger to get him to renounce citizenship. https://www.forbes.com/sites/robertwood/2022/07/10/boris-johnsons-big-win-beating-irs https://www.forbes.com/sites/robertwood/2022/07/10/boris-joh...

sidewndr46 2y ago

If you renounce your citizenship to avoid taxes, you are barred from ever entering the US or its territories again. Take one quick look at the EEZ of the US and tell me if you are OK with never traveling through those places again.