It’s no secret that Americans are obsessed with taxes and unhappy with the IRS. Take the IRS crackdown on foreign accounts and income …. Some people vote with their feet. For most, taxes are at least part–usually a big part–of the equation.
The golden years sometimes mean golden sands. Increasingly, for many “former” Americans, such golden sands are foreign rather than domestic beaches. Before ditching your passport, look before you leap.
Expatriation can be a difficult transition for legal and tax reasons. This was the subject of a recent Forbes article titled “Thousands Leave U.S. Over Taxes---5 Rules If You're Tempted.” Here are the five points cited (and further explained) in the article:
- There are distinct immigration and tax rules;
- Tax motivation is irrelevant;
- Consider tax filings carefully;
- Plan before you go; and
- Expatriating really means leaving.
Taxation is not the only reason to expatriate or the only difficulty you will face. Expatriation means an entire restructuring of your legal and financial life, so the laws of both the U.S. and your new country need to be considered.
Before saying goodbye to the U.S., expect extra thorough scrutiny from the IRS.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Forbes (August 12, 2013) “Thousands Leave U.S. Over Taxes---5 Rules If You're Tempted”