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, however, look before you leap.
Ask any veteran who has been deployed "over there."
Note to file: expatriation can be a rather difficult transition for a variety of reasons, to include 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. Uncle Sam does not want to see you (and your money) leave.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.For more information about estate planning and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Forbes (August 12, 2013) “Thousands Leave U.S. Over Taxes---5 Rules If You're Tempted”