Pros and Cons of Renouncing US Citizenship

what are the pros and what are the cons of expatriate in from your home country this video I'm going to talk to u.s. citizens who are considering going overseas renouncing their citizenship and I want to clear up some of the benefits and some of the downside so that you can make an informed decision [Music] hi I'm Andrew Henderson there are a lot of myths that surround expatriation and watch my video and find out all the myths about renouncing US citizenship things people get wrong this is not something that you do because you want to evade criminal prosecution or because you want to get out of a tax bill you've already incurred but what it is is a way to distance yourself from your home country in this case the United States I'm going to start by talking about the benefits that people get or the perceived benefits people get the first thing and the reason that the media always quotes that people leave the United States and give up their passport is the tax benefits so that may or may not be a benefit for you but for 6 & 7 & 8 figure earners what you're gonna find is the annoying of to file a US tax return you no longer have to file reports of your US bank accounts or form 54 71 for your form of foreign companies you'll no longer have a report and if the income that you're earning unless that's us source income unless you have stuff that's actually happening within the US so everything that you're doing overseas you know the report to the United States and you don't get paid tax on that you're no longer paying tax on your worldwide income so from the data Vic's page creation you become an alien you're no longer required to file and pay as a US citizen would and what that means is reduced compliance it also means that you're going to avoid the new provisions under some of the new tax laws where oh you can't live overseas and retain earnings indefinitely you have to pay something what US citizens are finding now is you're going to be paying something no matter where you live whether you've got a high-level job whether you've got a business there is no more free lunch the other thing that you will clear up is a gap in different tax systems US and Canadian citizens often have this if they're dual citizens because they live in Canada and there are certain tax permissions in Canada that don't match up with the provisions in the United States now someone who goes to live in Canada is not exactly someone who's avoiding tax they're paying plenty of tax in Canada but what happens is Canada will have a tax on one thing and the US won't have it another thing and then vice versa and so you won't be able to take advantage of foreign tax credits to offset certain taxes because that text won't apply in the United States I'll give an example of someone I know we did an interview with the Jack Sinclair who's a poker player he lives in London and in the UK you can make money playing poker and gambling and that money is not subject to tax but if he happen to be a US citizen then there would be no really for him he would just pay in the entire amount because the u.s. is a different system than the UK so what happens is even if you live in a high tax country you may have some taxes on income that you can't basically offset and so that is something that expatriation would prevent even if you're living in a high tax country you would clear that issue up more importantly to some is no exposure to future tax we talked in another video about how one person who came to me said this system is like a psycho girlfriend where you never know what's gonna happen next you never know if they're gonna go back thirty years and say yeah we want some money from you for that this kind of after-the-fact taxation by getting out you can generally and who knows what they do in the future but you can generally say okay fine this is it now whatever you do after that I'm out one thing in terms of future text you can prevent in many cases is if you've an estate tax issue now this is a rather complicated issue I'm not going to get it into it here in YouTube and I'm not an estate tax expert in general but if you are to expatiate that can make your estate tax planning more straightforward one of the things that people are also confused about is they think that oh they've got to pack everything up and to leave and to get other money outside of the United States well a lot of people who expect reform the United States have is investments that stay in the United States they may have rental properties they may have stocks they may have different investments and you're starting to pay tax on those and again it's a complicated situation depending on what those assets are but you can still bank in the United States you can still keep money there in fact the interest you earn of that money is tax-free and so a lot of people think that they've got to clear everything out that's actually a benefit that the United States is a place to bank it's not the worst place in the world so the best but it's not the worst and so if you're used to banking with a certain bank you can actually keep that relationship on top of that what some people tell me is that they actually feel better using a different passport they actually feel better travelling as a citizen of a different country or they just feel more free you walking into a bank and saying no I don't need to fill out that form because that doesn't apply to me FATCA no longer applies to me and so people feel lighter they feel freer preps they like the idiot not having to feel patriotic to a place they didn't feel that they belonged so those are the benefits what are the downsides I think that the biggest downside that applies to a lot of people is you no longer have access to the u.s. job market as countries really tighten up their immigration procedures there are a lot of countries opening up immigration procedures but a lot of developed countries are tightening up it's gonna be very hard to get a job if not impossible in the United States if you're not a US citizen and so if you give up that citizenship you're giving up easy access to people to work in the United States so if you're like one friend of mine who just has a really high paying job and he lives overseas you've gotta think long and hard about will I always be able to get a high paying job overseas you know how long are you able to take this can I save enough money that if something happens I can start my business or I can retire or I'll be okay so when someone comes to me and says Andrew I've got all my money in Bitcoin or in you know some kind of cryptocurrency and I want to expatriates investors I'm totally understanding of that but what I want that crypto investor to understand is that if for some reason their cryptocurrency goes to zero with a bullet and they've got to go finding a job they're probably gonna have a lot fewer job opportunities in Dominica or in you know Armenia than they are going to in the United States is you have to be prepared for that that's the number one thing that I think a lot of people don't think through is because we're so used to the idea that well I just go ahead and get a job well you may not be able to to do that if you don't have a Canadian or a visa waiver program passport you're gonna need a visa so you may not even be able to visit you may not even be able to come back let alone get a job not even come back I'm not suggesting that there's a campaign against people who have renounced I'm saying that if you don't have all the requisite things to show that you should get a visa you may not and so those are the things that you really have to understand you know is your family gonna visit you in another country you know how are you going to spend time with friends with family how are you gonna handle a job if that's what you need to do more minor provisions are you can't vote in elections you can't get access to consular protection if you get hurt if you could beaten up if your wallet gets stolen whatever the case may be you can't get emergency evacuation if you're in a war zone my answer that is don't go to a war zone but you know I think that those benefits are probably a lot smaller people think that the u.s. kind of embassy is gonna save them from all dumb things they can do and the reality is that's not how it works you know even if you get sent to jail on a foreign country they say hey here's a list of lawyers by the way we've invented them so I'm not convinced that that's really the reason to do it for me if you are a high-level entrepreneur you're confident in the direction that you're going or you're a high-level investor then there may be some benefits to to consider if you're someone who is newly in business or who hasn't saved up a lot of money or in some kind of volatile investment like cryptocurrency it may not make as much sense because you won't have that cushion to fall back on and if all of your money's being made from US source investments or if a lot of your money's being made from US source investments like US stocks you know US properties you make sure you find yourself in a worse tax situation so this is really something for someone who's decided I don't need to rely on the United States for my money anymore I can do it on my own I'm not investing there I'm not doing work there that's the kind of person who should consider making this decision and so I think that it's really important to clarify that stuff for you because a lot of people go into this starry-eyed they go into it emotional they go into it saying you know I'm a libertarian I Domenech I'm gonna show these guys I'm not paying for their wars I don't want anyone to jump into this without fully understanding yes here the stuff that I'm getting this stuff is is good but also understanding what you may be giving up I'm Andrew Henderson and if you're looking for a way to legally reduce your taxes build your freed and create well faster as a global citizen then you've come to the right place I want you to do three things right now number one click the buttons to subscribe to our channel make sure to get notifications so you never miss a new video number two get a copy of our number one best-selling book no mad capitalist on Amazon and learn all the dozens of benefits of our lifestyle and number three if you're already a six or seven figure entrepreneur and you want to put these strategies in place go to Nomad capitalist calm and find out how to get some help

Channel: Nomad Capitalist

Views: 17,938

Rating: 4.8482757 out of 5

Keywords: nomad capitalist, renouncing us citizenship, renouncing us citizenship taxes, renounce us citizenship, how to renounce us citizenship, us citizenship renunciation, us renounce citizenship, pros and cons of renouncing us citizenship, us expats, expatriate american, expatriation usa, us tax system

Id: 8I7vOJ6d9xk

Length: 9min 57sec (597 seconds)

Published: Fri Mar 22 2019