Billionaire heiress rips up US passport in tax protest

Glitzy socialite and heiress Denise Rich has renounced her US citizenship in protest over increased taxes for the wealthy.

In a move that pre-empts the Foreign Account Tax Compliance Act (FATCA), read more here, that requires offshore financial institutions to tell the US Internal Revenue Service about earnings and investments held overseas, Rich is set to live a peripatetic life afloat aboard her luxury yacht.

Rich is heiress to her father’s shoe empire – the Desco Corporation – while she has accrued substantial personal wealth from singing and songwriting.

She has penned lyrics for chart-topping “Frankie”, a 1986 hit for Sister Sledge.

Since then, she has written songs for Natalie Cole, Celine Dion, Jessica Simpson, Patti LaBelle, Chaka Khan and Diana Ross.

Rich has picked up three Grammy nominations during her music career.

Rich is the latest of several wealthy high profile US citizens to ditch their passports in favour of moving to countries with less taxing financial laws.

She follows in the footsteps of billionaire Eduardo Saverin, who made his fortune from the recent Facebook flotation in New York. Severin moved to Thailand.

Rich is tipped to save millions in tax from her decision to rip up her passport.

Her swish new York penthouse is on the market for $65 million, while earnings from songs, investments and other holdings are likely to gross millions of dollars every year.

The two-storey 20-room apartment looks out across the city from above the famous Fifth Avenue.

Tax hikes and the controversial FATCA laws that take effect from January 1, 2013, are driving many wealthy taxpayers out of the US – especially if their families have ties with other countries.

FATCA aims to raise billions in tax from undeclared offshore investments held by US taxpayers.

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