More Americans are saying a permanent goodbye to Uncle Sam because of issues such as onerous tax rules, a report says.

Data showing an increasing number of Americans are renouncing their citizenship continues to come through, with figures revealing that in the third quarter of 2017, there were 1,376 such cases.

The data, issued by the US Treasury Department and reported by Bloomberg, adds to perceptions that the extra-territorial nature of US tax, and its aggressive enforcement via legislation such as the FATCA rules, encourages some nationals to surrender their citizenship.  

The article said that if data in the fourth quarter mirrors that of 2016, when 2,365 people chose to expatriate, 2017’s annual tally would be 6,813, up by 26 per cent rise from 2016’s total figure.

Under FATCA, foreign financial institutions, a term applying not just to banks but even entities such as hedge funds, are required that if they hold assets for American expats, those accounts must be reported, or pay a 30 per cent tax on them. This situation has led some banks, such as HSBC and Deutsche Bank, to cease offering accounts to expat Americans. 

The trend is ironic given how the US also offers residency to wealthy foreign investors and remains a destination for immigrants. Cross-border wealth management for expat Americans, and for those living in the US or with exposure to the US market, remains a complex area. This publication recently reviewed a book guide by a practitioner in the space. See here.