Around 400,000 American expats have plans to renounce their US citizenship mainly due to strict FATCA tax rules, according to a new survey.
The poll by international tax service Greenbacks asked Americans living overseas if they plan to give up their citizenship because of the Foreign Account Tax Compliance Act (FATCA).
One in 20 (5%) said they are already planning to do so, while 19% admitted that they had not yet decided what to do and another 43% said they would not rule out the move.
Half of those giving up US citizenship would do so because of the red tape that comes with filing under FATCA.
The law requires foreign financial institutions to report details of any accounts controlled by US taxpayers.
FATCA is top expat issue
Expats are exempt unless their accounts top a minimum $200,000 limit.
The US has an estimated population of 8 million expats, according to the US State Department.
The survey also found that 57% of expats would welcome any move to repeal FATCA and 10% are trying to find a new bank as their existing provider has declined to deal with Americans.
Greenback says the research highlights that the most important issue for US expats was FATCA.
“Reports have shown that in the last quarter of 2016, the time period coinciding with the election of Donald Trump to the US Presidency, nearly double the amount of people renounced their citizenship as compared to the same period in 2015. Greenback survey data provides further evidence that expats aren’t, at large, enamoured of Donald Trump,’ said David McKeegan, co-founder of Greenback Expat Tax Services.
Trump does not represent US expats
“The vast majority of expats don’t feel their interests are fairly represented by the US government and continue to be frustrated by the obligations of citizenship based taxation and the burdensome tax filing process.
“This year’s survey once again reinforces the fact that only a small percentage of Americans abroad feel their needs are acknowledged and advocated for. That perception, plus the strain that comes with onerous expat tax obligations, makes renouncing citizenship a desirable option for many.”