DeVere labels Boris US tax defiance ‘noble’
The mayor of London’s refusal to comply with the Foreign Account Tax Compliance Act (FATCA) by paying his American taxes has been labelled “noble” by Nigel Green, chief executive at deVere.
Green said Boris Johnson’s claim that it is “outrageous” for the US to tax expat American citizens, made in an interview at the end of last month, was a “brave” stance against “this fatally flawed, imperialistic and economically dangerous law”.
Johnson was born in New York but left when he was five years old. However, he has yet to relinquish his US passport, despite saying he would in 2006, and as such the US Internal Revenue Service has sought to claim tax on the sale of his UK home.
When asked whether he would pay his tax bill in the interview, Johnson said: “No is the answer. I think it is absolutely outrageous. I haven’t lived in the United States since I was five years old. I pay the lion’s share of my tax, I pay my taxes to the full in the United Kingdom where I live and work.”
Green added that, while he does not advocate that individuals do not comply with FATCA, he hopes the Mayor’s “crusade” will inspire other high profile personalities to oppose the “highly polemical” new law.
FATCA requires foreign financial institutions (FFIs) to identify and report the financial details of all their American clients.
While its initial “withholding” stage was introduced in July, the controversial act’s final “reporting” stage will be introduced next year, at which point a 30% tax will be imposed by US authorities on withholdable payments made to FFIs who fail to comply.
Green added that there are “many reasons” to oppose FATCA, such as the fact it brands expat Americans as “financial pariahs”.
“US expats are now routinely rejected from FFIs because FATCA’s extensive and costly rules mean Americans are now usually perceived as more trouble than they are worth.
“Similarly, American firms operating in global markets are now also often hit with a leprosy-like status. Clearly, this can only be detrimental to their global competitiveness and could, in turn, hit American jobs and the long-term growth of the US economy.”
The US Treasury Department claims the number of Americans renouncing their citizenship rose by 220% in 2013, with many experts claiming this is a direct result of FATCA.
