Americans Living Abroad

Readers

The book is written for wealth managers and tax advisors whose clients are U.S. citizens or green card holders living or retiring abroad, or giving up U.S. status. It assumes a reader who knows the U.S. rules at home and needs the rules that apply once the client’s residence is elsewhere.

The country sections cover Germany, France, Switzerland, Italy and the United Kingdom. The income tax and estate tax conventions are treated as the rule, together with the saving clause that preserves U.S. taxation of citizens.

What the book covers

Part 2 treats status and taxation abroad: how citizenship attaches at birth or by descent and how the accidental American becomes compliant or renounces; the worldwide income tax of the American abroad and the relief from double taxation, including the special regimes that the five countries offer new residents; and the estate tax of the citizen and of the green card holder abroad against the host country’s inheritance tax.

Parts 3 and 4 cover banking and investing abroad, including local funds that are PFICs for a U.S. person, and the retirement abroad: the review before departure, the residence country’s tax on U.S. retirement accounts and pensions, Social Security under the totalization agreements and the conventions, and Medicare and health coverage outside the United States.

Parts 5 and 6 address the U.S. estate plan that moves with the client, with the revocable and irrevocable trust as the new country reads them, and the departure from the U.S. tax system: the tests for covered expatriate status, the mark-to-market regime and Form 8854.

The book stands alone. Like each book of the series, it opens with a foundations chapter on status, situs, the treaties and the reporting forms, adapted to its readers, and gives a working summary wherever its readers must apply a rule that another book of the series treats in full.

The questions the book answers

• How is an American abroad taxed by the United States and by the country of residence, and how is double taxation relieved?
• What can an accidental American do: become compliant, renounce, or both?
• Which estate and inheritance taxes apply to a citizen or green card holder who lives abroad?
• Which accounts can be kept in the United States, and when are local funds PFICs?
• What should be reviewed before a retirement abroad, and how does the residence country tax IRAs, 401(k) plans, Roth accounts and Social Security?
• What becomes of Medicare and health coverage abroad?
• Does a U.S. revocable or irrevocable trust still serve its purpose after the move?
• When is a departing citizen or green card holder a covered expatriate, and what does the exit tax cost?

The book and the firm’s practice

The author, Caroline E. Ashford, PhD, JD, leads Ashford International Law PC. The firm advises Americans living or retiring abroad on their U.S. returns, reporting and estate plan, and citizens and green card holders who give up U.S. status on the exit tax and its filings. The returns are prepared within the firm. Where the country of residence is Germany, the firm’s principal attorney, who is also licensed in Germany, advises on both sides.