As the threat of higher taxes looms, more wealthy investors are relinquishing their US citizenship. The co-founder of Facebook, Eduardo Saverin, did that very thing before Facebook went public. He has lived in Singapore since 2009.
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The coming fiscal cliff is the reason the wealthy are leaving. International planning attorneys are getting more phone calls from wealthy investors asking how to renounce their citizenship as they face a sharp increase in taxes both on income and capital gains.
Many of the wealthy already live abroad and have dual citizenship. Or they have family members who live abroad. Any exposure to US citizenship makes investors subject to the US tax system
, regardless of where they live or where their investments are located.
Inquiries into renouncing US citizenship began increasing after the IRS cracked down on investor accounts in Switzerland that had previously escaped taxation.