With Foreign Account Tax Compliance Acts’ new asset-disclosure rules coming into force from July 1, 2014, many US expats are considering giving up their US passports to escape the tough provisions enacted to deter tax evasion by US citizens.
According to the new rules, foreign banks, investment funds, and insurance companies having accounts of US citizens in excess of $50,000 are required to disclose details of such accounts to the US Internal Revenue Service. These rules have been framed to help the IRS identify instances of tax evasion through holding of offshore assets and accounts.
73% of respondents to a survey conducted by financial consultancy deVere Group said that the new rules imposed by FATCA have made them actively consider, think about, or even explore options related to voluntarily relinquishment of their US citizenship. A miniscule 16% said they would not consider relinquishment while 11% did not have an opinion on the question.
This poll included replies from 420 US citizens living in Asian countries like Hong Kong, China, Indonesia, Thailand, Philippines, Japan, India, and other nations like the UK, UAE and South Africa.