The number of Americans renouncing their citizenship rose to a record 5,411 in 2016 — a gain of 26 percent from the prior year, according to the IRS.
The exodus gained momentum in the fourth quarter — notable for the election of President Donald Trump — when 2,365 individuals expatriated, up 124 percent from the same period a year earlier.
But don’t just go blaming the guy in the White House.
Experts contend it’s not politics but taxes that motivate Americans to expatriate.
The US bases its taxes on citizenship, whereas most countries tax on the basis of residency.
That means Americans must pay tax on income earned overseas.
A steady rise in US renunciations began in 2010 with the passage of the Foreign Account Tax Compliance Act, which required foreign banks holding assets for US citizens to report them to the IRS — or pay to the IRS 30 percent of gross proceeds generated by those accounts.
The restrictions caused some foreign banks to stop serving US expats altogether.
It also caused some dual citizens living abroad to reconsider whether their status was worth the IRS scrutiny.
The 1,534 renunciations recorded the year of FATCA’s enactment represented a 107 percent rise over the previous year’s.
And though they have since grown at an annual rate of 23.4 percent, the total remains insignificant in comparison to the 8 million Americans living overseas.
One name on the fourth-quarter list, which the IRS released on Feb. 9, is former London mayor Boris Johnson.
Born in the US to British parents, he was registered with the UK consulate and US authorities.
Our editors found this article on this site using Google and regenerated it for our readers.
