79% of American expats said they are thinking about renouncing their US passport due to the implications of the Foreign Account Tax Compliance Act (FATCA), which came into effect on 1 July, according to a survey conducted by deVere Group over 414 American expat clients.
The number is up by 11% over the same poll carried out last November, in which 68% had answered in the affirmative.
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"The 11% jump in the number of Americans who are tempted to sever official ties with the United States highlights how the true scope of FATCA’s adverse effects is now really hitting US citizens who live or work overseas," said Nigel Green, deVere Group’s founder and chief executive.
Green said that respondents of the latest survey flagged up specific problems, such as not being able to open bank accounts in their countries of residence, having existing ones shut down by banks, or the costs and lengthy processes of complying with FATCA.
"Some told us that they felt they were now under suspicion by the IRS, even though there was no question of any wrongdoing or having any taxes owing."
Official figures from the Treasury Department show that passport relinquishments were up 220% in 2013, compared with the previous year.
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By GlobalData"It’s our experience that most American expats are proud patriots and are loathed to give up their US citizenship. With this in mind, and taking into account other potential considerations, including ‘exit taxes’, it is recommended that expats explore all the available options to them about how to mitigate the effects of FATCA with an independent financial advisor with cross-border expertise before citizenship is renounced," Green concluded.
