Possible indication of #FATCA causing banking problems for #americansabroad in Canada

Cdn resident's #RRSP account frozen bc of self-identification as one of #americansabroad in Canada - isaacbrocksociety.ca/2013/05/27/tra… – Likely #FATCA—
U.S. Citizen Abroad (@USCitizenAbroad) June 06, 2013

A comment at the Isaac Brock Society included the following:

On Oct. 18th, 2012 I applied at the Royal Bank to become a signature to my husbands direct investing account. The question of my birth place was on the application form and as always I advised I was born in the U.S. At the time I was unaware of FATCA.
During that meeting, via phone, I was advised by RBS Direct Investing that my RRSP account was frozen and I could no longer trade within that account. The individual I dealt with at RBC Direct Investing was a Senior Manager. My account would be frozen until such time as I completed a “w-9″ form which required a SSN which I have never had. I have made appts. twice at Toronto Consulate to apply for SSN but have cancelled as I am not sure it is the right move for me to make at this time.
I did write letters to the PM, Jim Flaherty and my MP….in fact, just mailed them yesterday regarding my situation and I did relay the issue with the Royal Bank.
My husband and I will be attending the meeting on June 15th ….bit of a distance for us but we will be there.

http://isaacbrocksociety.ca/2013/05/27/traumatized-by-the-irs-and-us-reaching-into-canada/comment-page-3/#comment-374381

April 17, 2013: Happy Birthday to Canada’s Charter of Rights

@JustinTrudeau April 17/13 = 31st anniversary Trudeau Cdn Charter of Rights. Used to protect Canada from #FATCA ? renounceuscitizenship.wordpress.com/2012/12/21/fat…—
U.S. Citizen Abroad (@USCitizenAbroad) April 17, 2013

On Sunday Justin Trudeau became the newest leader of the Liberal Party of Canada. Canadians over the age of 55, have been denied “Freedom 55″ by accident of where they were born, remember the day Justin was born. Yes, he is the son of former Prime Minister Pierre Trudeau. Love him or hate him, Trudeau Senior made his mark on Canada. His legacy was the “Canadian Charter of Rights and Freedoms”. At the time the Charter was enacted, the focus was on “individual rights”. Interestingly, many opposed the Charter because they thought that to give Canadians individual rights would make the country too much like the United States. Most would agree, on balance that the Charter has been a good thing for Canada.

Why we are so cruel to us citizen living aboard?

The title of this post was a Google search term that led to a number of hits.  A search on Bing led to an equally impressive number of hits. (Note that each search revealed results for “why we are so cruel to us citizen living abroad“.) Fascinating question. How can this be? Why is this so?

President Carter believes in Human Rights and #Americansabroad

“Numbering well over one million and representing the United States around the world in all aspects of commerce, these overseas Americans constitute an important national asset. Recently, however, U.S. law governing the rights and obligations of these citizens has fallen subject to increasing criticism – first, as to its fairness; and second, as to its wisdom, at a time when America’s international economic competitiveness, which depends heavily on effective business activity by U.S. citizens abroad, is under severe challenge. I therefore deemed it important that the policy implicit in this diverse body of law be subjected to a fresh and comprehensive examination.” – Senator George McGovern July 2, 1980 – From: U.S. Law Affecting Americans Living and Working Abroad

This post is an attempt to bring together a number of comments at the Isaac Brock Society. It is interesting to compare the Democratic Party of the Carter years to the Democratic Party of the Obama years. It appears to be “night” and “day”. It is important to note that President Carter does believe that the Obama administration is committing human rights abuses. It would be interesting to   know what his opinion would be of the way in which the Obama democrats are treating U.S. citizens abroad.

The attack on U.S. citizens abroad by the Obama Democrats has been duly noted. It is interesting to note that another Democratic President – Jimmy Carter was friendly to U.S. citizens abroad. President Carter now runs the “Carter Center” in Georgia, which among other things, promotes human rights. In a June 2012 op-ed in the New York Times:

A Cruel and Unusual Record nyti.ms/Miycll – President Jimmy Carter Oped NY Times—
U.S. Citizen Abroad (@USCitizenAbroad) January 22, 2013

Cook v. Tait 2: The presumption of GOVERNMENT benefit

The presumption of GOVERNMENT benefit wherever the citizen may live

Liberty is the true casualty of war – James Madison: Dedicated to Ron Paul

We've spent about $2 trillion on foreign wars in past decade. My take on why we need to bring an end to 'war on terror' bit.ly/RXWO73—
Fareed Zakaria (@FareedZakaria) December 10, 2012

If you are NOT Twitter literate click here.

The U.S. is a world leader in forms, compliance and violating the sovereignty of other nations. This results in resentment, which leads to hatred of America, which leads to non-government sponsored violence (“terrorism”),  which has led to U.S. retaliation, which is called the “War on Terror”.

Why do people hate America?  Congressman Ron Paul put this very well by saying:

Homelanders and #Americansabroad debate the status of US citizens abroad in a FATCA world

Wary Swiss Banks Shun Yanks

is an article that appeared in the Wall Street Journal on October 19, 2012. The article was reported at the Isaac Brock Society. The article is fairly good. But, what is really interesting are comments. The comments reveal that “Homelanders” and US citizens abroad life in “different worlds”. If you have the time, I suggest reading all the comments. But, since you don’t I have tweeted some of the more interesting ones.

To me, the comments confirm that one can understand the problems of life as a US citizen abroad if you have actually lived the life of one. I find the comments very discouraging. It seems to me that there are now two kinds of US citizens abroad:

1. Those who are not tax compliant and will keep their heads buried in the sand. This group is just hiding.

2. Those who are tax compliant and cannot live with the expense and time that continued US tax compliance requires. This group is renouncing their citizenship.

Either way, unless you live in the Homeland, US citizenship is a difficult cross to bear.

Letter of a Canadian businessman to his dual U.S./Canada citizen son on the occasion of his high school graduation

“Good citizenship” and “Your citizenship”

The Isaac Brock Society recently featured a discussion  about how and when to advise young people about the potential problems of U.S. citizenship and whether they should consider renouncing U.S. citizenship. As parents, teachers, mentors and friends we should pass on to our young people the benefits of our (in varying degrees) knowledge, wisdom and experience. We do this because we want to equip them with the skills they need to make the best life decisions that they can.

The books:  “Letters of  A Businessman to His Son” and “Letters of A Businessman to His Daughter“, by G. Kingsley Ward, are wonderful examples of  this principle.  They are chock full of practical advice and thoughts on -  the only business that really matters – “The Business of Life”.

I have been inspired by Mr. Ward. Here is the letter (with many factual modifications to protect the young person in question) that I wrote  on  the occasion of  that young person’s  High School graduation.

U.S. persons in Canada must pay capital gains tax on sale of principal residence – makes upward mobility difficult

Payable by U.S. persons on the sale of a principal residence

“The principal residence exemption provides Canadian taxpayers with a generous tax break, possibly one we take for granted. In other countries the gain on the sale of a residence is not always completely free of tax. In the United States, for example, only the first $250,000 is exempted. For Canadian tax purposes, there is no monetary limit on the size of the capital gain that can be excluded from your income.”

So says: HR Block Canada in Tax Talk

It may come as a surprise to U.S. persons (Green Card holders, citizens or those who spend too much in the U.S.) that capital gains from the sale of a principal residence are taxable. The general principle is described here. The principle is that one gets a $250,000 exemption from capital gains tax. But, as always make sure that you read the rules carefully.

This is one more example of how citizenship-based taxation harms U.S. persons who live outside the U.S. For example, in Canada, the sale of a principal residence is a “tax free capital gain”. Not so in the U.S. What does this mean practically? A lot.

Grover Norquist and Dan Mitchell argue for territorial taxation – “IRS Discount” associated with U.S. entities or persons

Introduction – Territorial vs. Worldwide Taxation or Global Taxation – It’s becoming topical!

July 15, 2012 – the Financial Times ran a front page article called “China eases taxes for foreign companies” The article included the following:

China will cut taxes on the profits that foreign companies take out of the country by up to 50 per cent after rules on withholding taxes were relaxed to encourage more overseas investment.

The move will also apply to dividends paid by Chinese listed companies to foreign shareholders through the Qualified Foreign Institutional Investor scheme . In both cases, the lower tax rates will apply only to companies and shareholders based in countries, such as the UK, that have double taxation agreements with China.

The changes could save companies billions of dollars worth of tax payments, which might initially lead them to repatriate more profits, but ultimately should provide incentives for more investments, according to experts at KPMG. US companies, however, cannot benefit as they are taxed on a global basis by US authorities.