FATCA...I don't understand...

[seahorse513]

I  am not sure I understand this article
http://finance.yahoo.com/news/americans-giving-passports-jump-sixfold-105958873.html

I don't understand why giving up citizenship would solve that problem. I mean If I was to go back to the UK, and I still had accounts here, I am still subject to report income on interest...right??
or am I totally not understanding?? 

[IassaFTots]

Because the US is the only nation that taxes people regardless of where they reside, according to the article....regardless of how that income is earned.   The only way to escape those taxes is to give up your citizenship.  Quite an unfortunate turn of events. 

[obumazombie]

If you are out of the country for more than about 330 days, any income earned (outside the states) is not taxable by the US.

[Lacarnut]

Income that is derived in a foreign country is not taxable provided those funds stay overseas. If you start a business in another country, you can exclude that income provided it stays there. However, you have to report all assets to the IRS. If you do not, there are severe penalties. The IRS has forced banks world wide to hand over the names of US citizens that hold accounts there. Like the article state, the US is the only country in the world that taxes ex pats income that is made in another country.

Ex pats who renounce their citizenship have to have citizenship in another country. This is no simple matter unless you have dual citizenship. It could take you 5 years in a Carribean country to gain citizenship and is a long drawn out process or you can buy citizenship if you are well heeled. Ex pats that are still citizens of this country still have to file and pay federal income taxes on income derived from the states. The renouncement of citizenship has to be filed at a US embassy.

Obamazombie is correct about the length of time you can earn income outside the states without being taxed. I think, you can only come back to the states a couple of times for so many days. Very restrictive.     

[IassaFTots]

Income that is derived in a foreign country is not taxable provided those funds stay overseas. If you start a business in another country, you can exclude that income provided it stays there. However, you have to report all assets to the IRS. If you do not, there are severe penalties. The IRS has forced banks world wide to hand over the names of US citizens that hold accounts there. Like the article state, the US is the only country in the world that taxes ex pats income that is made in another country.

Ex pats who renounce their citizenship have to have citizenship in another country. This is no simple matter unless you have dual citizenship. It could take you 5 years in a Carribean country to gain citizenship and is a long drawn out process or you can buy citizenship if you are well heeled. Ex pats that are still citizens of this country still have to file and pay federal income taxes on income derived from the states. The renouncement of citizenship has to be filed at a US embassy.    

Ok, that's the rub, they get taxed if they send it back.  If the IRS (piss be on them) are so stringent, I wonder how other countries handle the same situation? 

[seahorse513]

Because the US is the only nation that taxes people regardless of where they reside, according to the article....regardless of how that income is earned.   The only way to escape those taxes is to give up your citizenship.  Quite an unfortunate turn of events. 

But isn't also what is taxable is the actual interest?

A lot of international actors/actresses, musicians have legal residences in other countries. There are probably a lot of politicians, and ultra wealthy families who have dual residences(and they can/ or do get around that) , or military officials stationed abroad..

[IassaFTots]

But isn't also what is taxable is the actual interest?

A lot of international actors/actresses, musicians have legal residences in other countries. There are probably a lot of politicians, and ultra wealthy families who have dual residences(and they can/ or do get around that) , or military officials stationed abroad..

Lacarnut answered it above pretty well I think.

[seahorse513]

yes he did!!!

[Lacarnut]

Ok, that's the rub, they get taxed if they send it back.  If the IRS (piss be on them) are so stringent, I wonder how other countries handle the same situation? 

Many of the rich in France and other European countries have moved and they do not have to pay the government taxes on income. Just the opposite of what the IRS does. Not sure if they have to renounce their citizenship or not.

Several years ago, I thought about moving to Panama or Belize. Just too much of a hassle and just about any country you move to you will be considered an outsider. Health care, property ownership, inheritance, crime, etc is a big concern.

[freedumb2003b]

I  am not sure I understand this article
http://finance.yahoo.com/news/americans-giving-passports-jump-sixfold-105958873.html

I don't understand why giving up citizenship would solve that problem. I mean If I was to go back to the UK, and I still had accounts here, I am still subject to report income on interest...right??
or am I totally not understanding?? 

If you are an American citizen you can be taxed on any money you make anywhere in the world.

By giving up your citizenship AND taking your money with you outside of the USA, your money is untouchable.

The USA is stupid that way.

[freedumb2003b]

If you are out of the country for more than about 330 days, any income earned (outside the states) is not taxable by the US.

Can you source that?  It is a great fact if it can be implemented

[Lacarnut]

If you are an American citizen you can be taxed on any money you make anywhere in the world.

By giving up your citizenship AND taking your money with you outside of the USA, your money is untouchable.

The USA is stupid that way.

Before you can give up your citizenship, you have to prove that you have citizenship in another country. Otherwise, the consulate will not approve it. Plus, you can not travel without a passport. If you do not have dual citizenship, that is no easy task cause it usually takes 5 years in most countries to become a citizen. Also, you have to show that you have financial resources. In countries like NZ or Aussie, they require that you put several hundred thousand dollars in a bank which pays no interest. The comments above refer to a retiree rather than someone that will work in that country. Also, certain countries forbid you to open a business unless it is a specialized one that the natives can not do. Moving to another country is quite complex and requires a lot of planning. You are entering another world with their laws, inheritance, judicial system, banking, property ownership, etc. Opening a bank account or getting a drivers lic. can be a hassle in places like Belize/Mexico/Panama.

[Wineslob]

Costa Rica keeps looking better, and better........

[JohnnyReb]

Costa Rica keeps looking better, and better........

You're already late to the party. 43 years ago(May 1970), I bought a bulldozer from two farming brothers that were moving to Costa Rica. They were selling out here and buying a large plantation there.

[Wineslob]

You're already late to the party. 43 years ago(May 1970), I bought a bulldozer from two farming brothers that were moving to Costa Rica. They were selling out here and buying a large plantation there.

 

[JohnnyReb]

 

They didn't enter Costa Rica illegally.

[Lacarnut]

Costa Rica keeps looking better, and better........

If you are thinking about buying land, be aware there are many scammers out there like someone selling you property they do not own. Need to get a good realtor and a good lawyer. Also, squatters are a problem and the laws there are quite different in Costa Rica than in the USA.   

[J P Sousa]

This is my "reach" retirement (if I win the lotto  )

Pristine Bay, Roatán Island, Honduras

http://www.margotandmatt.com/listings/401.htm
.