To NOT want my children to get US passports?

[Daffodilly]

DH is American (by birth) but also has British citizenship. We met, live and had our children in UK. No current plans to move to US.

Children are entitled to get US passports as well as UK ones. But my understanding is that at same time they are issued with a social security number too and being US citizens has implications for future tax situation. US citizens are taxed on worldwide income, regardless of where they live.

I feel this could be a huge burden to place on our children when they may never choose to live or work in US. DH places significant value on US citizenship for them.

[Nigglenaggle]

Probably I am totally wrong about this, but I thought that your children chose one or the other once they came of age at 18yrs, and only have dual nationality until then, so shouldnt be an issue?

[MrsFionaCharming]

Would they be able to apply for them as adults if they decided they wanted them? If so, I'd leave it up to them, when they're older.

[SoleSource]

I agree with Gribbet123.

[HollyBerryBush]

Something that perhaps needs to be checked with the IRS rather than word of mouth?

There are reciprocahal agreements in place between countries for tax collection purposes.

FWIW my friends children have quadrupal nationality (now that is hedging your bets!) British/American?canazdian/German and they are only taxed in the UK - but they have all 4 passports

[BobbiFleckmann]

nope - I'm a UK / US dual and the OP is quite correct. IF you renounce your US citizenship there's an exit tax based on the value of your assets. The obligation is to file a return annually and an obligation to pay additional tax on top of your UK tax (if you're resident in the UK not US; not sure about the reciprocal tax treaties if you're resident elsewhere) once your annual income exceeds about £80k
Are they entitled to take up the US citizenship once they're older if they want to live there? My brother took his up and lives there, I've only spent a brief period living / working there and so it's a bit of a millstone

[DeepRedBetty]

I only know about dual Dutch and UK nationality. I really think you need to find a better source of info than us Vipers on this one. Not often I say that...

[eachtigertires]

The expat forum usually has some good advice about this sort of issue.

[Tee2072]

They may not ever claim their citizenship if they travel to the US without US passports.

The threshold for paying US tax this year is apx $80,000 or about £60,000 per year.

There are many many benefits to US citizenship.

They do not have to choose one or the other at 18. They may have both.

[Daffodilly]

Thanks for the replies. We have had some advice from the accountants that DH uses to do his US tax returns. They say children are citizens and liable whether or not we take up the passport - though I say how will the greedy American tax system know they even exist if we don't get them passports and they never choose to live there.

I think there is a time limit on how long they can apply, or at least in a straightforward way (hence not waiting until adults). Used to be you could t be dual US and something nationality, but that has changed in the time DH has been in UK.

Gah it is all horribly complicated. I never should have married "foreign" ;-)

[BobbiFleckmann]

it's a shag. An expensive one. ANd don't think it'll speed your way through the lines at JFK - they won't let you through the US passport line with the rest of them. I'm not convinced that the accountant is right about automatic citizenship for offspring of a citizen born out of the country - I thought dual nationality had to be applied for. The other thing to remember is that taking a minor US citizen out of the states is basically impossible following divorce unless the citizen parent agrees (assuming you did ever plan to (a) move there and then (b) get divorced)

[claudedebussy]

i think it's a bad idea to get US passports unless you really have to, for the tax reasons. and at any time they can change the law.

most worrying is that uk courts will uphold US law so if the US courts decide you owe 5 billion $ in tax, the uk courts will enforce it.

[wonderingsoul]

my children are half American. born in the UK. we had time register them as American and to get the social surcurty number..like you register births in the UK. which ex Dh never did so they are unofficially duel nationality if this helps.

[BlatantLies]

Mmmm. Interesting...

DS2 was born in the US and has a US passport and a UK passport. I will have to do some more research on this as it looks like there, could potentially, have problems with tax implications in the the future.

This FT Article is a few years old but gives some useful info.

[FairPhyllis]

If the children are US citizens I think they will be legally obliged, if they travel to the US, to enter and leave on US passports.

OP is correct about the tax situation and the kids will need to think quite carefully about the benefits of retaining citizenship when they are older. It might be worth it on the basis that it is fecking hard to get permission to work in the US. Otherwise I do not see many benefits of it for an EU citizen.

[Gryffindor]

Yanbu. There are also implications in respect of the extra-territorial reach of some US legislation that may impact them. For example I am not able to hire a US person into my team because of US sanctions implications. the US is tightening this even further with the launch of FATCA next year.

However, if they ever wish to live in the US then the dual passports will of course be a massive advantage.

[Knowsabitabouteducation]

They have to file US tax returns every year, but unless are very high earners, eg over £100k, they are unlikely to pay US taxes. Even beyond the $80k that you take off the top of your income, there is also credit against foreign taxes paid.

US citizen is very sought after!

[littlemrssleepy]

That's a bit pants isn't it. I was reading about the changes to French tax law which seemed to suggest that if the French Government considers you resident for tax purposes (e.g if you own a holiday home there) then you will pay tax in France on all your income as well - even that not earned in France. So, by that definition, if your children were American Citizens who continue to live in UK and have some kind of dealings in France they will pay tax to 3 different governments. Presuming they are loaded to live such a lifestyle they will pay 75% tax in France, 40% in UK and ?? in USA. How on earth does that work???

[Knowsabitabouteducation]

These countries have tax treaties to prevent double taxation.

[dreamingbohemian]

YABU

The potential benefits of US citizenship in terms of jobs and schooling far outweigh the potential negatives.

You don't even have to file a tax return until you make over $8000. You don't pay extra taxes unless you make major bucks.

On the other hand, being able to travel and work and live in the US with no problem is a pretty huge potential bonus.

Especially as your DH really wants them to have it, I think it's pretty churlish of you to deny it because maybe they might have a tax bill in thirty or forty years.

My DS has a US and an EU passport, I actually think it's one of the best gifts I'm giving him. He will have so much more opportunity than I've had. I don't know anyone with dual passports who regrets it.

[SquinkiesRule]

We are a family of duals, the older boys are living in UK and debating renouncing US citizenship due to tax laws, I really don't blame them one is very likely to exceed the amounts where he will pay tax to both counties in the next few years. You are supposed to file federal taxes each year and FBAR for all accounts over $10,000 whether you will owe the US or not.
Are you sure your children are eligible before you get upset about it all. Your Dh must have lived in the US for a set number of years and 4 (I think) of those have to be after the age of 14 or 15. I know once we move back my Dd will not be eligible to pass on her US citizenship unless she moves back to US as an adult as we have no plans to live here again and she is only 8.
I no longer believe the benefits of having both citizenship's for the children exceed the negatives, if it were the 80's or 90's I'd say yes but not any more.

[mrsbunnylove]

the uk is hated around the world but america is even more hated. stick to uk passports. if possible, move and get irish ones.

[KRITIQ]

I think it would be best to get accurate information from the US Consulate. From what I understand, What dreaming said is closest to correct.

If you are born in the US or have a parent who is a US Citizen, you don't have to apply. You are a US citizen unless you renounce your citizenship. Following a Supreme Court ruling, you don't have to renounce your US citizenship if Naturalized as a citizen of another country.

last filed a tax return in the US in 2988. I have worked and paid taxes in the UK since then. I've renewed my UD passport twice since moving and no one has chased me for taxes. I always travel to the US on the US passport.

Perhaps I've been lucky, but I doubt it!

[KRITIQ]

Sorry, I'm not a time traveller. I last submitted a 1040 (US Tax return) in 1988. My dad was a tax accountant then and my brother is now. I grilled them on this. The $80 k threshold seems to be where it changes.

[kickassangel]

Getting a passport is not the same as being a citizen, it sounds like you may be getting the two mixed up. They can be citizens without a passport. Being a citizen will make them liable for a tax return, but if they were born in the UK and never end up lving there than that isn't a problem.

They have the right to citizenship whether you get passports or not, but they can let it lapse.

They don't need to get a passport in order to claim their citizenship.

The US doesn't recognize dual nationality, but it does recognize that some people have it, and therefore do not prosecute if people continue with both.

[dreamingbohemian]

Ooh I didn't know you were American Kritiq

I would say many many American expats do not bother with US taxes, with no repercussions

When you add in all the tax deductions and legal tax avoidance you can do -- really, you need to be making a LOT of money before you would have to pay extra taxes.

I just think the more globalised the world gets, the better off you are having more passports. It just gives you more options.