The number of Americans renouncing their citizenship has grown significantly over the past few years, hitting a record high of 5,411 in 2016. Renunciations fell slightly last year, though there were still nearly 1,000 more than in 2015.
Americans may choose to renounce their citizenship for a variety of reasons: High taxes (the US is one of the few countries that taxes citizens based on worldwide income), family circumstances, and legal complications are just some of the explanations.
The process of renouncing US citizenship can be complex and expensive. Here’s how to do it:
Make sure you have a second nationality before you renounce.
If you are not a citizen of another country, it is possible for you to become stateless after renouncing, which means you won’t be protected by any government. Stateless people can have significant trouble owning property, working, receiving medical help, and attending school.
A US Consulate can deny your request to renounce your citizenship if you don’t already have a second passport or another nationality.
Schedule appointments with an embassy or consulate abroad.
If you want to renounce, you’ll need to schedule multiple appointments with a US embassy or consulate in another country.
Ideally, you can attend these meetings in the same country where you intend to live, but you’re allowed to go to any US embassy or consulate as long as your stay in that country is legal.
Consulates require you to show up with your US birth certificate and, if you own one, a certificate of naturalization from the country where you will be living.
Meet with diplomatic officials to discuss your case and sign documents.
Before the first appointment, you’ll need to fill out and sign the DS-4079 questionnaire, which is used to request the loss of US citizenship
Diplomatic officials use the first interview to ensure that you aren’t renouncing your citizenship under duress. The second appointment includes reading an oath in which you state your desire to renounce citizenship.
Your documents are then sent to the US State Department, which reviews the paperwork and makes a decision on your case in about one or two months. You will receive your Certificate of Loss of Nationality afterward.
Fill out a final income tax return.
After renouncing your citizenship, you no longer have to pay US income taxes, and you won’t have to worry about reporting income unless you invest or do business in the US.
However, you are required to file a final tax return covering the time between January 1 and the day you renounce.
Pay a $US2,350 renunciation fee.
The US government also charges a renunciation fee. Renouncing used to be free before the Foreign Account Tax Compliance Act was passed in 2010. It’s gone up in price since then – from $US450 to the current price of $US2,350.
This is one of the highest renunciation fees in the world.According to the State Department, the fee went up due to a rise in demand and paperwork, though it remains 20 times higher than the average fee in other high-income nations.
You may need to pay an exit tax depending on your income.
If your average annual net income tax in the past five years was $US162,000 or more – or if your net worth is more than $US2 million – you may have to pay an exit tax.
Just because you’ve renounced your citizenship doesn’t mean you can run away from your US-based problems. You can’t avoid prosecution for any crimes you’ve committed in violation of US law, and you will need to address any financial obligations, such as child support payments.
If you have children, you can’t renounce their citizenship for them.
If you have a child, you can’t renounce their citizenship for them. This also applies to adults who lack the capacity to show they are acting voluntarily.
A minor who wants to renounce their US citizenship would need to prove to a consulate that they are acting of their own free will and that they understand the consequences of losing citizenship.
According to the State Department, children below the age of 16 are not mature enough to renounce their citizenship.
After you renounce, you may need a visa to return to the United States.
You may need a visa to enter the US again after renouncing your citizenship. This doesn’t apply if you have citizenship from a visa-waiver country, such as France, Japan, or the United Kingdom.
The Department of Homeland Security could bar you from the US if it finds that you renounced your citizenship to avoid paying taxes.
You will likely keep receiving Social Security benefits, but the rules differ depending on where you move to.
Generally, expats have access to Social Security benefits after renouncing their US citizenship.
For anyone to be eligible for Social Security benefits, they need to pay into the program for at least 10 years. Non-citizens may be taxed at higher rates, which partly depends on which country they live in, though the US has agreements with some countries to prevent dual taxation.
Social Security can be complicated further by where you move to, as the Social Security Administration generally does not send benefits directly to people living in Kazakhstan, Cuba, Georgia, and several other locations. Exceptions are possible, and you may sometimes be able to appear in person at a US Embassy to collect your benefits.
Renouncing also means you will lose the right to vote in US elections. Expatriates aren’t protected by the US government when they are abroad, and they can no longer freely live and work in the US.
You can’t get your citizenship back after you renounce it.
You won’t be able to renew your citizenship if you decide to renounce it.
However, the Immigration and Nationality Act states that someone who renounces their citizenship before they turn 18 can reinstate it if they contact the State Department within six months after turning 18.
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