The number of American expats owning up to US tax authorities under an Obama-era amnesty has surged in 2017, according to figures released by London-based Bambridge Accountants.
The firm, which specialises in handling the tax affairs of US citizens living in Britain, reports a four-fold year-on-year increase in the number of Americans declaring their UK assets to Washington for the first time.
It notes that the US is one of only two countries in the world that requires its citizens to file an annual tax return wherever they are in the world. In 2012 the Obama administration introduced a generous amnesty to encourage expats who had failed to do so to come forward.
The streamlined filing compliance procedures, as it is known, allows American expats – even those who have lived abroad undeclared for many years – to get right with the US tax authorities without incurring penalties.
In return for declaring their foreign income and assets for the past three years (previous tax years can be ignored) and paying any US tax they owe, an expat completing the process is exempted from prosecution.
Although the Trump administration has yet to make any official announcement on the policy, many expect the amnesty to be curtailed or even ended.
UK banks are now obliged to notify US authorities of assets held by American customers, and in February it was reported that the US Internal Revenue Service (IRS) has been granted the authority to cancel the passports of expats who owe more than $50,000 in US tax.
Carrot and stick
“Despite the generosity of the amnesty it offers, for years the uptake of the streamlined filing process among Britain’s 200,000 US expats was relatively modest,” said Alistair Bambridge, senior partner at Bambridge Accountants.
“Yet in the first three months of 2017 we handled an average of four applications a day from UK-based Americans keen to use it to settle up with the US tax authorities. By contrast, in the first quarter of 2016 we saw an average of just one a day.
“The amnesty is only available to Americans who voluntarily contact the IRS to declare their foreign earnings and assets. Those who wait for the US tax authorities to come knocking could face a large fine in addition to any tax bill.
“Despite Uncle Sam’s famously long reach, it’s thought there could be thousands of Americans living quite legally in the UK and paying UK tax, but who are below the radar of US tax authorities.
“The growing sense that the net could be closing in on them – and the fear that the amnesty for those who do own up could be withdrawn – is proving a perfect combination of carrot and stick.”
The Indo-US trade corridor is expected to grow to $500 billion by 2025. Currently, the two-way merchandise trade between these two countries is at $66.7 billion.
There has been an uptick of treasurers inquiring about interest rate risk management in recent months as interest rates in the US and UK have started to show a rise in momentum, said Chatham Financial at the annual Bellin treasury conference.
PSD2 is set to remake the EU payments marketplace. This deliberate public policy exercise is going to regulate and demonstrate what next generation financial crime competencies must be and cement the standard going forward.
Inthe UK’s recent Autumn Budget, Chancellor Phillip Hammond vouched for a plan to build a British economy that is “fit for the ... read more