Podcast

In Part I of this article, we describe a plan that any U.S. citizen can use to legally and permanently end their future obligation to pay U.S. tax on their worldwide income or estate.

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: Important Consequences of Expatriation

 In this second part, we explain:

• The nuts and bolts of expatriation, including the legal process of expatriation
• The tax consequences of expatriation
• The immigration consequences of expatriation
• The pros and cons of U.S. investments once you expatriate
• The tax consequences should you choose to spend more than a few months each year in the United States after expatriation

Expatriation: The Basics

Once you’ve obtained a second passport and qualified for residence in another country, you can begin the legal process of expatriation.

To do so, you must make an appointment with a U.S. consulate. You generally cannot expatriate within the territorial boundaries of the United States. The consular officer will explain the consequences of expatriation and have you sign some forms.

Two or more appointments may be necessary to complete the process. At the end of whatever sequence of visits applies at the consulate you choose, you’ll then hand in your U.S. passport. Anywhere from several weeks to several months later, you’ll receive an official document called a “Certificate of Loss of Nationality” (CLN). With the receipt of this document, you will have officially relinquished your U.S. nationality.