U.S. Exit Tax And FATCA 30% Withholding

“Kathleen, I’ve been reading your newsletter for a few years now, although I am a few years shy of retiring. If you want to retire abroad to a foreign country don’t you have to pay 30% of your assets to the IRS when you move out of the U.S. lock, stock, and barrel?”

–Richard A., United States

No, you don’t. Moving overseas has nothing to do with the exit tax for renouncing your citizenship. Residing in another country is not the same as being a citizen of another country, and neither is the same as renouncing your U.S. citizenship.

Also, I think that you may be confusing the 30% withholding for international wire transfers tied to the HIRE Act with the exit tax. Note, as well, that the 30% “FATCA” withholding is only if the bank you’re wiring money to isn’t compliant with IRS rules.

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