The six months between 18 and 18 and a half

Figures relate to tax year 2025 (US)

American tax law gives young people who give up US citizenship a special break. If they act before they reach 18 and a half, the net worth and tax liability tests for the exit tax do not apply to them.

That break is the minor exception. It matters to British families because many children here hold American citizenship through a parent and never asked for it.

But the window is narrow, the embassy will not rush a teenager, and one part of the test applies however young you are. This guide explains all three.

Key takeaways

• The minor exception applies if you expatriate before age 18½.
• You must not have been US resident for more than 10 tax years.
• The age rule switches off the $2 million and $206,000 tests, not the certification.
• You still file Form 8854 and certify five years of compliance.
• The State Department strongly prefers renunciants to be at least 18.
• That leaves roughly six months to act.
• A separate dual-citizen-at-birth exception may cover you anyway.
• Missing Form 8854 carries a $10,000 penalty.

What is the minor exception?

It is a carve-out in the exit tax rules for young people. According to the Instructions for Form 8854, someone who expatriated before age 18½, and who was a US resident for no more than 10 tax years before that, is not a covered expatriate merely because of the wealth or tax liability tests.

Covered expatriates face the mark-to-market exit tax. This carve-out removes two of the three routes into that status.

It does not remove the third. That is the part families most often overlook.

What are the three covered expatriate tests?

You are a covered expatriate if any one applies. Your average annual net income tax for the five years before expatriation exceeds $206,000, a figure for 2025. Your net worth is $2 million or more on the expatriation date. Or you fail to certify on Form 8854 that you met all federal tax obligations for those five years.

The first two are about wealth and income. The third is about paperwork.

So a teenager with no money at all can still become a covered expatriate. All it takes is a missing certification.

Why does the certification still matter?

The Form 8854 instructions say plainly that dual citizens and certain minors are still covered expatriates unless they file Form 8854 and certify five years of compliance. So the age rule protects a young renunciant from the wealth tests, but not from unfiled returns.

For most teenagers the compliance is simple. Many had income below the filing threshold and owed no returns at all.

But some had savings, part-time earnings, or trust income. Those years need checking before anyone signs the certification.

Who qualifies for the minor exception?

You need two things. You must expatriate before you reach age 18½. And you must have been a resident of the United States for no more than 10 tax years before you expatriated. Residence here uses the substantial presence test, so time spent living in America counts, while holidays usually do not.

A child born and raised in Britain with an American parent usually meets the residence limit easily.

A teenager who spent most of childhood in America and moved here at 12 may not. Count the years carefully.

How does the minor exception differ from the dual citizen exception?

There are two separate exceptions. The dual citizen exception covers people who were born with both citizenships, are still citizens and tax residents of the other country, and spent no more than 10 of the last 15 years resident in America. The minor exception has no birth or residence-abroad condition, only the age and 10-year limits.

Many British teenagers qualify under both. Then the 18½ deadline matters much less.

The age-based route does real work where the dual citizen exception fails. That usually means a teenager who became British later, or who is not a UK tax resident on the expatriation date.

When does the dual citizen route fail?

It fails if you did not hold both nationalities at birth. A child born in America who later naturalised as British is an example. It also fails if, on the expatriation date, you are not taxed as a resident of the other country, for instance because you are studying in a third country.

In those cases the age-based route may be the only protection from the wealth tests.

A young person with a trust fund or a family gift above $2 million then has a real reason to act before 18½.

Why is the window only six months?

Because the two government departments pull in different directions. The tax rules reward expatriating before 18½. The State Department, which accepts renunciations, says it highly recommends that minors aged 16 and over wait until they are at least 18. In practice, the comfortable window is the six months after an 18th birthday.

That is not a legal bar on younger applicants. It is a strong preference.

Six months is not long once you allow for an appointment, an interview, and the certificate that follows.

Can a child under 18 renounce at all?

Yes, but it is rare. The IRS relief procedures FAQ, quoting the State Department, says it is extremely unlikely that a Certificate of Loss of Nationality would be approved for someone who takes the oath under 16. Any minor's decision faces review for parental pressure and for the maturity to understand the consequences.

Parents cannot renounce on a child's behalf. The young person must make the decision personally.

So in practice this route is used by 18-year-olds. Very few use it younger.

When does the expatriation date fall?

According to the Form 8854 instructions, the expatriation date is usually the day you renounce before a US consular officer, provided the State Department later confirms it with a Certificate of Loss of Nationality. The certificate can arrive months later, but the date of the oath is what counts.

That matters here. The oath must happen before 18½, not the paperwork that follows.

Our guide to the Certificate of Loss of Nationality explains what the certificate shows and how long it takes.

A worked example of the timing

These facts are illustrative only. A young woman born in America moves to Britain at age 8 and naturalises as British at 14. She was a US resident for eight tax years. At 18 she inherits investments worth $2.4 million, so she fails the net worth test.

First, the dual citizen exception does not help, because she was not British at birth.

Second, the age-based route does help, because she has fewer than 10 years of US residence. If she renounces at 18 years and 4 months, the net worth test no longer makes her a covered expatriate.

If she waits until 18 years and 7 months, that protection is gone. She would then be a covered expatriate and face the exit tax.

The tests side by side

What does the exit tax actually cost?

A covered expatriate pays tax as if they sold most of their property for market value on the day before expatriation. For 2025 the first $890,000 of net gain is excluded. Some assets, such as certain pensions and deferred compensation, follow separate rules.

For a teenager with a large inheritance, much of the value may be gain-free if the assets were inherited recently at market value.

The bigger cost often comes later. Gifts and bequests from a covered expatriate to US citizens can face a separate tax on the recipient.

What is the section 2801 tax?

It is a tax on Americans who receive gifts or inheritances from a covered expatriate. The Form 8854 instructions flag new guidance on it. A covered expatriate who later gives money to an American sibling, or leaves it to American children, can create a tax bill for those family members.

That is a reason to care about covered status even when the exit tax itself is small.

For a family with American relatives, keeping a young renunciant outside covered status protects them for decades.

What if the young person never filed US returns?

That is common, and it is fixable. The certification requires compliance for the five years before expatriation. For many teenagers that means confirming that no return was due, because income stayed below the filing threshold.

Where returns were due, they must be filed before or with Form 8854. That includes FBARs if the young person's accounts exceeded the threshold.

Our guide to Form 8854 and the exit tax covers the form line by line.

Can the relief procedures help a minor?

Yes, in rare cases. The Relief Procedures for Certain Former Citizens let some people with no US filing history certify compliance by filing six years of returns. The IRS FAQ says a minor can use them only if the State Department actually approves a certificate for that minor.

The usual eligibility rules still apply. Net worth must be under $2 million and total tax for the six years at most $25,000.

For most 18-year-olds the relief procedures are unnecessary. Filing the few returns that were due is simpler.

Does a US Social Security number matter?

You need an identifying number on Form 8854. The instructions say this is usually a Social Security number. If you never had one, you attach a statement explaining why. Many British-born dual citizens never applied for one.

That missing number does not block renunciation. But it does affect how you file.

Plan ahead, because applying for a number from Britain can take months and the six-month window may not allow it.

What happens to US tax after renunciation?

Once the expatriation date passes, you stop being a US citizen for tax purposes. Income after that date is taxed in America only if it has a US source, much like any other British resident. The year of expatriation usually needs a dual-status return.

You no longer file FBARs after the year in which you expatriate.

Our guide to US tax after renouncing covers the first years as a non-American.

What should families do before the 18th birthday?

Use the years before 18 for the paperwork, not the oath. Gather the child's US passport or birth record, check which years needed a return, and confirm whether either exception applies. If net worth may reach $2 million, decide early whether the age-based route will be needed.

Then book the earliest sensible appointment after the 18th birthday.

Booking ahead protects the six-month window. Leaving it until 18 often means leaving it too late.

Is renunciation reversible?

No. The State Department's review of a young applicant focuses on whether they understand that the act is irrevocable, according to the IRS relief procedures FAQ. Once the certificate issues, the young person is no longer an American citizen. Regaining citizenship later would mean going through immigration like anyone else.

That is the real reason the embassy prefers applicants to be adults. A tax saving does not justify a decision made too early.

So families should treat the tax planning as secondary. The young person's own settled wish comes first.

What records should the family keep?

Keep a copy of the Certificate of Loss of Nationality, the Form 8854 as filed, and the return it went with. Keep the residence count and the net worth working that supported the exception. Banks, and occasionally the IRS, may ask years later for proof of when citizenship ended.

Keep the old US passport too, even once it is cancelled.

These papers are hard to recreate. A single folder, kept for life, saves a great deal of trouble later.

Does renouncing change UK tax?

No. Britain taxes residents on the basis of residence, not nationality. A young British resident pays the same UK tax before and after giving up American citizenship. The change is entirely on the US side.

The one indirect effect is simpler finances. British banks and investments stop asking about American status.

In our practice we see that relief matter as much to young people as any tax saving.

Common mistakes and penalties with the minor exception

The first mistake is assuming the minor exception removes every test. It removes the wealth tests only, so a missing certification still makes the young person a covered expatriate.

The second is booking the embassy appointment after 18½ has already passed.

The third is forgetting Form 8854 because there is no tax to pay. The penalty for not filing is $10,000.

The fourth is counting residence years wrongly for a teenager who grew up partly in America.

How to plan a renunciation around the minor exception

1. Confirm the young person's date of birth and the date they turn 18½.
2. Count tax years of US residence under the substantial presence test.
3. Check whether the dual citizen exception applies on its own.
4. Estimate net worth and average tax for the five-year tests.
5. Identify any US returns or FBARs that were due and file them.
6. Book a consular appointment for soon after the 18th birthday.
7. Take the oath before 18½ if the age-based route is needed.
8. File Form 8854 with the return for the year of expatriation.

How US UK Tax Accountants helps

We prepare the US side of renunciation for young people in Britain and their families. That includes the residence count, the exception analysis, any catch-up returns, and the Form 8854 certification that keeps a renunciant outside covered status.

We also plan the timetable, so the oath falls inside the six-month window. Our expatriation service covers the tax work from first review to the final return.

If your child is approaching 18, speak to our team while there is still time to plan.

Last reviewed 29 October 2026. This article is general information and not personal tax advice. Thresholds shown apply to 2025 expatriations.

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