Dual nationality

[Zep 0]

Lets say some one who was born in the USA of British parent/s
then takes up the right to hold both passports but chooses to reside
in the UK.
Question- Is said person a bona fida citizen of the USA and held resposable
to American law.

Gone fishing

[Andy9o8 2]

Zep

Lets say some one who was born in the USA of British parent/s
then takes up the right to hold both passports but chooses to reside
in the UK.
Question- Is said person a bona fida citizen of the USA and held resposable
to American law.

That's really 2 questions: (1) bona fide citizenship, and (2) subject to US law.

A person born in the US remains a bona fide US citizen for life, notwithstanding any possible dual citizenships, unless he expressly renounces his US citizenship in a manner recognized by US law as a valid renunciation (which becomes an issue in, for example, tax scenarios).

If your question is whether such a person is liable for US income tax (it often comes up in cases of US citizen ex-pats who have moved long-term to other countries), that's a complex question that is very individually fact-specific, and thus is not subject to a general answer.

FWIW- generally speaking, all people, regardless of citizenship, physically on US soil are subject to virtually all US laws.

I imagine you have a specific scenario in mind. A general question cannot always be answered. If you can present a specific (actual or hypothetical) factual scenario, it may be easier to answer your inquiry.

[Zep 0]

"I imagine you have a specific scenario in mind. A general question cannot always be answered.
If you can present a specific (actual or hypothetical) factual scenario, it may be easier to answer your inquiry."

Yes I do. If said person left the USA to study abroad and never returned,
but kept their US citizenship/passport, IE, to keep their options open.
Would that person be liable to taxation on monies gained outside of the US.

Gone fishing

[Andy9o8 2]

Zep

"I imagine you have a specific scenario in mind. A general question cannot always be answered.
If you can present a specific (actual or hypothetical) factual scenario, it may be easier to answer your inquiry."

Yes I do. If said person left the USA to study abroad and never returned,
but kept their US citizenship/passport, IE, to keep their options open.
Would that person be liable to taxation on monies gained outside of the US.

Possibly (possibly!) yes... but I'm not a tax attorney, so I'm not sure w/o researching it out. From what I generally understand, the IRS almost always takes the position that the answer is Yes. One should really consult an attorney who specializes in US taxation to get a reliable answer about a specific scenario.

Here's what the IRS says about it:

http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad

Quote

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside. (Emphasis mine.)

Also see these articles:

Time to debunk the myth of the tax-free expat

American Tax Hustle For U.S. Citizens Abroad

Americans abroad find citizenship too taxing to keep

The third article mentions ex-pat US citizens who relinquish their US passports seeking to avoid US income tax on their foreign-earned (and foreign-taxed!) income. A word of caution: If you're going this route, do it the right way. Consult a US tax attorney on what is sufficient "renunciation" to avoid US tax liability. The US has very specific requirements as to what kind of relinquishment of passports and/or citizenship is needed to accomplish this; and if you don't do it exactly the way US law and regulations say it must be done, the IRS (and maybe the US courts) will still deem you liable for US income tax.

[Zep 0]

Thanks very helpful.

Gone fishing

[DougH 270]

In general yes, they are responsible for taxes. Individuals with US citizenship are taxed on their world wide income. If they are also paying foreign taxes they have the opportunity to take either a deduction for foreign taxes paid, or a foreign tax credit. This applied only to income tax types, I don't believe you can claim VAT for example.

There have also been numerous foreign account reporting programs over the past few years, that have stiff penalties for non compliance.

This hypothetical person is going to need a good tax attorney if they missed the foreign account reporting deadlines, and then later voluntary disclosure periods, and haven't been filing US tax returns.

"The restraining order says you're only allowed to touch me in freefall"
=P

[theonlyski 8]

An exception I know about is the militarys "Combat Zone Tax Exclusion" basically let us not get taxed on any money we made while deployed for OIF/OEF/OND.

Also applies to people flying over and I believe within 12nm from the coast on the ocean side of Iraq.

"I may be a dirty pirate hooker...but I'm not about to go stand on the corner." iluvtofly
DPH -7, TDS 578, Muff 5153, SCR 14890
I'm an asshole, and I approve this message

[Andy9o8 2]

theonlyski

Also applies to people flying over and I believe within 12nm from the coast on the ocean side of Iraq.

Well, there you go: practically a license to steal.

[theonlyski 8]

Andy9o8

*** Also applies to people flying over and I believe within 12nm from the coast on the ocean side of Iraq.

Well, there you go: practically a license to steal.

*Deployed on US military orders

"I may be a dirty pirate hooker...but I'm not about to go stand on the corner." iluvtofly
DPH -7, TDS 578, Muff 5153, SCR 14890
I'm an asshole, and I approve this message