Leaving the US tax system, without paying more than the exit costs.
Renouncing citizenship or handing back a long-held Green Card is a tax event. Done carelessly it triggers a deemed sale of everything you own; planned properly, most people leave cleanly.
Figures relate to tax year 2025 (US) · 2025-26 (UK)
Covered or not is the whole question
Three tests decide whether the exit tax touches you: net worth above $2 million, average tax liability above the annual threshold, or — the one that catches people — inability to certify five years of full US tax compliance.
The compliance test means a clean-up filing often has to come first. Sequenced right, someone who would have been a covered expatriate frequently leaves as an uncovered one, owing nothing on the way out.
- Covered expatriate analysis on real numbers
- Pre-expatriation planning: gifts, timing, compliance
- Five-year certification and catch-up filings
- Form 8854 and the final dual-status return
Green Cards don't expire for tax
Moving home doesn't end Green Card taxation — only formal abandonment on Form I-407 does, and holders of eight of the last fifteen years face the same exit tax as citizens. The year you file the form decides which side of that line you land on.
Life after exit, kept clean
Expatriation ends the worldwide net, not every thread: US-source income still needs W-8 forms and the right withholding, US property keeps its filing duties, and covered expatriates leave behind a punitive tax on future gifts to US family members.
We file the final dual-status return and Form 8854, reset your withholding paperwork, and map what the remaining US touchpoints will require — so the exit stays exited.
- Final dual-status return and Form 8854
- W-8BEN and withholding reset on US income
- Gift planning around the section 2801 trap
Primary sources
Official guidance from the IRS, FinCEN and GOV.UK. Thresholds and rates on those pages are updated annually — check the current tax year before relying on a figure.
Questions, Answered.
What clients ask about expatriation & exit tax
Do I keep filing after I renounce?
You file a final-year return covering the part of the year you were still a US person, along with Form 8854.
After that the obligation ends, provided the expatriation was properly completed and certified.
Is there an ongoing consequence for my heirs?
There can be. Gifts and bequests from a covered expatriate to US persons can attract a separate charge on the recipient.
It is a rarely discussed part of the regime and it can outlast the expatriation by decades.
Can I avoid covered status?
Sometimes, through the timing of the expatriation and the composition of your assets, and always by being able to certify five years of compliance.
Planning is only possible before the fact, which is the argument for looking at it early.
What is a covered expatriate?
It is a status test based on net worth, average tax liability over recent years, and whether you can certify five years of tax compliance.
Falling into it triggers the exit tax regime, so establishing where you sit before filing matters a great deal.
How does the exit tax work?
In broad terms it treats your worldwide assets as sold the day before expatriation and taxes the resulting gain, with an exclusion amount applied.
Certain assets - notably pensions and deferred compensation - are handled under separate rules rather than the deemed sale.
Does giving up a Green Card count?
It can. Long-term permanent residents are subject to the same regime as citizens who renounce, based on how many of the last fifteen years you held the card.
People often assume only citizenship is caught, and that assumption is expensive.
Should I get compliant before renouncing?
Yes. Certifying five years of compliance is part of the process, and being unable to do so pushes you into covered status regardless of your numbers.
That is usually the deciding factor in sequencing catch-up filings ahead of expatriation.
Next Step.
Tell us what you hold — the scope and a fixed fee follow in writing.