Renouncing US citizenship

Apologies if this is not the right place to post, but I was wondering if anyone here has decided to give up their US citizenship after obtaining UK citizenship. The whole tax/house buying/financial issue is really starting to bother me, and I have zero plans to go back to live or work in the US. I'm nearing retirement and would love to simplify things for myself (the dual citizen) and my husband (a UK citizen) for the future.

We have had a few members renounce (you have to renounce, you can't relinquish).  It's a big process and about $2500.  But, of course, it is worth it for some.

Outside of the cost and process, a big consideration is if you have family in the USA.  If one were to get ill, would you be okay being restricted to a short term visit?

Are you able to elaborate your concerns regarding taxes?  I suspect most of it isn't as scary as you may fear.

Good points, as always (and thank you for the proper terminology), KFDancer. I have corrected my post.

My concern regarding taxes is the continuing need to file each year (more an inconvenience than a concern) as well as the taxation on savings/investments. I have not been able to find anyone in London who has been able to assist us with portfolio management since moving here in 2015, so our money is just sitting around doing nothing for fear of being taxed.

We are also looking to buy a home, but just yesterday I read an article that raised some issues for us. The article is here: https://americanexpatfinance.com/mortgages-property/item/903-withers-what-us-individuals-need-to-know-before-buying-a-uk-home

Right now we are living with my elderly mother-in-law who has dementia, but when that situation changes, we want to buy our own place and move out of London. Caring for her has been a real strain for both of us for the past three years. I don't have caregiving responsibilities for anyone in the US, nor do I anticipate that in the future.

You still have to file (I think) for a few years after you renounce.  If I recall correctly.  It's definitely a whole BIG THING.

There are a couple of really good investment firms who literally have made a business for catering for US citizens in the UK.  We work with one and it's well worth the slightly higher fees than a UK-only IFA would have.  I use Tanager Wealth Management and would recommend them.  They invest for US citizens in the UK only.  That's literally their market.

So the article for the house.... a bit of something out of nothing.

First of all, you say you are nearing retirement, so I suspect that means you'll be buying outright and not taking out a mortgage.  Even if you are taking a mortgage (do you know about the age restrictions in the UK with mortgages?), you could consider just using your husband's income and have him listed as the owner of the property.

Other options are not having the mortgage set up as Joint Tenancy but Tenants in Common, which decides the "ownership split" of the property.

As a USC, your first $250k of capital gains is tax free.  And that's ONLY triggered during the SALE of the property.  If you are choosing your "forever home", it's really not a concern.  And the house would have to really skyrocket in value (more than $500k if you and your husband were both listed as the owners) before you would start to have any capital gain concerns.  It really does give a lot of wiggle room.  As you can see, if you were to list yourself as having 10% ownership in the house, it would take a MASSIVE gain for you to reach $250k as a capital gain. 

Basically there are LOADS of us here who have UK property and are still USC and have just ensured we've put the right structure in place to eliminate the risk of US tax exposure. 

Not trying to talk you out of renouncing, just letting you know there are work arounds and other options.  That don't involve piles of legal paperwork, money, and a trip to the Embassy.  All 3 are things I don't enjoy.   

Tanger Wealth Management...we'll be contacting them very soon. Thank you for that tip.

I am 60 and my husband is four years younger. We have money for a larger than normal downpayment (that money that has just been sitting around doing nothing since 2015) but will have to take a small mortgage, more than likely. We plan to pay off the rest of it when the house we're living in now is sold (which will happen after my 92-year-old MIL dies or is moved to a care home). I think the Tenants in Common route is our best bet (I'm a bit uncomfortable about the property being in my husband's name alone, although if it's a big deal, I'll have to get over it).

You really are incredible, KFDancer. You've helped lower my stress/blood pressure significantly.

So the bigger worry is the UK side!  They are very ageist.  They recently upped the mortgage age to 70 from 65.   

If you bought a place today, they'd give you a 10 year mortgage.  The End.  It goes by the eldest person on the mortgage.  Nice, eh?

I looked into the Tenants in Common.  I have one divorce under my belt.  So, while I certainly do not plan for a second divorce, I am FULLY aware that it only takes one person to get divorced (whereas it takes two to marry).  Thankfully the UK divorce laws do NOT take into account the mortgage setup when it comes to separating assets.  What they would consider is if one party (really only if unmarried) were to contribute a substantially larger down payment.

For example, say you bought a place  and you paid 70% down and your partner 30%.  We'll say you put in £7,000 and your partner £3,000.  The "normal" thing to happen would be in the event of a split, you would get your £7,000, he would get his £3,000 and the remaining equity would be split equally.  As you are married, it would be a 50/50 split.   

But GURL, all my assets are under my husband.  I'm "okay" with it.  We have kids and I genuinely do not think he would try to completely f* me if things went tits up.  But you don't divorce the person you marry.   

We are DEEP into a stressful home extension... so I can't say with complete confidence right now that we'll be together forever.  I may have completely lost my sh*t last night.     I wasn't pleased with him and he was NOT impressed at my proper red headed tantrum.  Ooopsies.  We both apologised this morning.  Hopefully the worst of the extension is behind us. 

I also have one divorce under my belt (back in the US), and while we split on good terms, I got somewhat screwed financially because of how our accounts were set up. That's why I'm reluctant to put everything in my UK hubby's name; another is that I have been the primary breadwinner throughout our entire marriage--by a fairly large sum.

We have been happily married since 1999, so if we can survive moving to the US and taking care of his mom, I think we can probably survive anything (although the very stressful situation you're going through right now might be a significant challenge for us too).

Good luck to you!

You still have to file (I think) for a few years after you renounce.  If I recall correctly.  It's definitely a whole BIG THING.

I'm not sure on this either, but that was before the exit tax was introduced in 2008. (The rules before then allowed the IRS to tax certain U.S.-source income for up to 10 years after renouncing that would normally be exempt by tax treaty. Even then if you had no U.S.-source income it wouldn't have applied.)