Four out of five American expatriates are considering giving up their United States citizenship due to the ongoing implementation of the Foreign Account Tax Compliance Act (FATCA), according to a new survey by the deVere Group.
The deVere Group, an independent international financial consultancy, surveyed 414 of its American expat clients, and found that 79 percent said they had "actively considered, are thinking about or have explored the options of" renouncing their US passport due to the implications of FATCA, which came into force on July 1.
It was disclosed that the number is up by 11 percent over the same poll carried out last November, in which 68 percent had answered in the affirmative.
"The 11 percent jump in the number of Americans who are tempted to sever official ties with the US highlights how the true scope of FATCA's adverse effects is now really hitting US citizens who live or work overseas," said Nigel Green, deVere Group's founder and chief executive.
Respondents to the latest survey flagged up specific problems, such as not being able to open bank accounts in their countries of residence, having existing ones shut down by banks, or the costs and lengthy processes of complying with FATCA. Green added that "some told us that they felt they were now under suspicion by the Internal Revenue Service, even though there was no question of any wrongdoing or having any taxes owing."
"It's our experience that most American expats are proud patriots and are loth to give up their US citizenship," Green concluded. "With this in mind, and taking into account other potential considerations, including 'exit taxes,' it is recommended that expats explore all the available options to them about how to mitigate the effects of FATCA before citizenship is renounced."
by Mike Godfrey, Tax-News.com, Washington