# Maintaining US residency in Europe



## Überling

Hello, all. In less than a month, my wife (a German citizen with green card) and I (a US citizen) will be moving permanently from the US to Germany. We have our investments with Charles Schwab through a US financial advisor whom we would like to keep. However, he just informed me that unless I maintain legal residency in the US, Charles Schwab will close our accounts (due to FATCA). So I am searching for someone who can advise me if there is some way to maintain a US residency (perhaps through a P.O. Box or a family member’s US property?). Does this sound like something anyone here could help me with? Surely others have been in a similar predicament!

And if there is no solution and I have to move my investments to a firm that will work with US expats living in Europe, can anyone recommend a good firm to consider?

Many thanks,
Derek


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## Bevdeforges

As a US citizen you are always considered "tax resident" in the US - until and unless you renounce your US citizenship. But residence is more difficult. Technically, you can maintain a US address (best if it is a mailing address, not a PO box address) which may work for a while. The financial institutions have ways of checking this - mainly through two-factor security (those codes they send to your mobile phone) or by checking the IP address you use to access the website.

The other issue is that your US financial advisor may not be terribly up to date with the "international" aspects of your financial situation (especially if you can't reveal your true residence to him or her). There are tax implications of being an expat with US investments - the first of which is that your wife should probably formally surrender her Green Card at the first opportunity so that she, at least, is no longer subject to US taxation.


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## Überling

Bevdeforges said:


> As a US citizen you are always considered "tax resident" in the US - until and unless you renounce your US citizenship. But residence is more difficult. Technically, you can maintain a US address (best if it is a mailing address, not a PO box address) which may work for a while. The financial institutions have ways of checking this - mainly through two-factor security (those codes they send to your mobile phone) or by checking the IP address you use to access the website.
> 
> The other issue is that your US financial advisor may not be terribly up to date with the "international" aspects of your financial situation (especially if you can't reveal your true residence to him or her). There are tax implications of being an expat with US investments - the first of which is that your wife should probably formally surrender her Green Card at the first opportunity so that she, at least, is no longer subject to US taxation.


Thank you, I appreciate the insight.


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## Gaertnerin

Bevdeforges said:


> There are tax implications of being an expat with US investments - the first of which is that your wife should probably formally surrender her Green Card at the first opportunity so that she, at least, is no longer subject to US taxation.


I hope that you know that before your wife considers surrendering her Green Card, to check with both your Immigration Attorney and tax advisors on any impact the US Exit Tax will have on her... this applies to Green Card holders as well as US Citizens who renounce their citizenship. And there are good reasons for keeping the Green Card too if she's married to a US Citizen... you've got to weigh the pros/cons there.


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## Bevdeforges

Gaertnerin said:


> And there are good reasons for keeping the Green Card too if she's married to a US Citizen...


Don't do it if you're planning to be away from the US for more than a year. I know of several Green Card holders who relocated overseas and hung onto their Green Cards to allow them to enter the US to visit friends and family. US Immigration and the IRS regard the Green Card in very different lights and if you let yourself get into the situation where Immigration says your card is no good any more, but the IRS insists that you're still a "US taxpayer" things get really tricky real fast. 

OTOH, having one spouse in the family who is NOT a "US person" for tax purposes can be very handy when it comes to investing and bank accounts.


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## Überling

OK, important questions for an immigration attorney.



Bevdeforges said:


> OTOH, having one spouse in the family who is NOT a "US person" for tax purposes can be very handy when it comes to investing and bank accounts.


Can you explain how?

Thanks again.


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## Bevdeforges

I would really stay away from immigration agents or attorneys. The fact that you are working through an agent can be taken as a "signal" that you have some sort of problem you're trying to get around. The French system is pretty straight forward and can be navigated quite well without expensive legal assistance.

In the situation where one spouse is an EU national and the other is a US citizen, normally the US citizen will file their US taxes as "married, filing separately." This allows the couple to put "problematic" investments into the name of the EU national and thus out of the hands/view of the IRS. Besides FBAR, where you must report the high balance every year of all "foreign accounts" you hold (singly or jointly with anyone), the IRS has certain rather onerous conditions for investments considered PFICs or "foreign trusts" or a few other categories. This includes what are dead normal savings and investment vehicles here in France, like assurance vie, anything that smacks of being a mutual fund and the "tax free savings accounts" that are (as the name says) tax-free for French tax purposes. With one spouse who is not a US taxpayer, those sorts of accounts can be put into the one spouse's name, and declared as required for French tax purposes. (In France a married couple is taxed jointly unless legally separated.) France requires declaration of foreign bank accounts, but does not require balance information like the US does.


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## Überling

Bevdeforges said:


> I would really stay away from immigration agents or attorneys. The fact that you are working through an agent can be taken as a "signal" that you have some sort of problem you're trying to get around. The French system is pretty straight forward and can be navigated quite well without expensive legal assistance.
> 
> In the situation where one spouse is an EU national and the other is a US citizen, normally the US citizen will file their US taxes as "married, filing separately." This allows the couple to put "problematic" investments into the name of the EU national and thus out of the hands/view of the IRS. Besides FBAR, where you must report the high balance every year of all "foreign accounts" you hold (singly or jointly with anyone), the IRS has certain rather onerous conditions for investments considered PFICs or "foreign trusts" or a few other categories. This includes what are dead normal savings and investment vehicles here in France, like assurance vie, anything that smacks of being a mutual fund and the "tax free savings accounts" that are (as the name says) tax-free for French tax purposes. With one spouse who is not a US taxpayer, those sorts of accounts can be put into the one spouse's name, and declared as required for French tax purposes. (In France a married couple is taxed jointly unless legally separated.) France requires declaration of foreign bank accounts, but does not require balance information like the US does.


Interesting but also somewhat daunting. I do plan to find tax preparers who can navigate these perilous waters. 

Again, thanks!


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