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Frequently Asked Questions About the Changing Expatriate Environment

How are you affected by the U.S. individual expatriation tax rules?


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The U.S. imposes income tax on the worldwide income of its citizens and green card holders even if they reside overseas. U.S. citizens and certain green card holders residing overseas are also subject to U.S. gift and estate tax on transfers of worldwide assets. As a result, such individuals sometimes consider relinquishing their citizenship or green card with the hope of freeing themselves from the U.S. tax system. However, giving up U.S. citizenship or a green card on or after June 17, 2008 — the date of enactment of the Heroes Earning Assistance and Relief Tax (HEART) Act, P.L. 110-245 — may cause the expatriating individual to be subject to an exit tax and treated as if all assets were sold on the day before the expatriation date. Furthermore, U.S. persons receiving gifts from persons expatriating under the HEART Act may be subject to tax.

This publication provides a brief overview of the U.S. expatriation rules under the HEART Act. To read more, download the attached PDF.

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