For those who have a Green Card but no longer live in the U.S. and consider surrendering the green card, you should be mindful of the expatriation tax and the potential consequences for further travel to the U.S. It applies not only to U.S. citizens giving up their citizenship, but also to Green Card holders who surrender their green card after they have held it in at least 8 out of the past 15 tax years. When applying the 8-of-15-year test, holding the green card for as little as one day in a particular year causes that year to be counted.  Therefore, even if you had your green card for as little as six years and a few days, you could fall under the 8 year requirement. You will be subject to the “exit tax” if the 8 year requirement is met, and if:

• Your net worth of more than $2 million;
• Your average net annual U.S. tax liability of more than $157,000 (2014 figure – adjusted annually for inflation); or
• You failed to certify that you have satisfied all U.S. federal tax obligations for the past five years.

In this case, you will be treated as if you had sold all your assets on the day prior to expatriation and any net gain on this deemed sale in excess of $680,000 (2014 figure) is taxable.

In addition, it is important to note that persons who expatriate solely for tax purposes may become inadmissible and therefore unable to enter the United States for any reason, even as a visitor.

For tax planning, please consult with a tax specialist. Any tax information contained in this communication is not intended as tax advice.