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Comment by nvarsj | Hacker News Reader

So you're saying it's all okay as long as you remain a permanent employee your entire life with a company owned pension plan? Is that a joke? What if you want to buy property, invest in a business, open up a private retirement fund, or a million other things. All of these are a massive land mine for any American living abroad. On top of that you have things like FACTA that affects everyone. This kind of stuff has negatively touched the entire expat community, saying otherwise just shows ignorance.

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Buying property doesn't expose you to GILTI/transition taxes.

Neither does investing in a business. You just have to pay taxes on income derived from that business, as normal.

FATCA can be completely nullified by not maintaining foreign bank accounts. Keep your money in the US, problem solved. Maybe that's not an option for everyone but it's still an option.

I think you have a very narrow view of an expats life. If you live in a country for 10+ years, it is impractical to not have a local bank account. You can't even get a rental contract easily without a bank account.

Buying property exposes you to capital gains tax, which is essentially double taxation, because the UK taxes the buyer unlike the US.

GILTI tax is limited to company ownership. Which is what hit me. I realize that won't affect a lot of people, but for those in the IT field it is very common in London to have a one man or small group consultancy. Because of this, I was essentially retroactively taxed on all company revenues despite not having access to that money (since it's in the company, obviously). Truly insane. Then to pay the retroactive tax, you have to withdraw money from your company which obviously incurs local taxes. Massive double taxation.

This is all the tip of the iceberg. There are many ways to get screwed as an American abroad.

Genuine question, have you considered giving in and going to work in the USA? As an American, working as a software consultant in the UK is swimming against the tide. You could be free of the tax burden and earn more by working practically anywhere in the USA.

I know money isn't everything, but would be curious to know what is keeping you in London (as someone in an analogous situation asking myself the same question).

My wife is British, and my kids are thoroughly integrated with the local community. So that's what keeps me here. If I was single I'd definitely go back at this point, it's too much of a headache, and my earning potential would be way higher in the USA like you say.

> FATCA can be completely nullified by not maintaining foreign bank accounts.

That is not even remotely feasible. You pay forex fees every time you buy milk? Lots of government stuff / utility companies will only accept local bank accounts. The hassle and expense of having only a foreign bank account in a foreign currency is massive.

As someone who's lived abroad several times in my life, I agree. I've always had local bank accounts in my countries of residence.

That said, I have recently heard of a new product called the Transferwise Borderless Account that lets you hold money in different currencies, and along with the provisioning of local banking IDs in several jurisdictions like the EU, UK, Au/NZ, Hungary, Romania, Singapore and the U.S. It also comes with a debit Mastercard.

Any thoughts about this?

https://transferwise.com/us/borderless/

Transferwise is great, I do have one of their multi currency debit cards. It doesn't fully solve the problem though, it's more useful for visits and online purchases.

You couldn't get paid straight into it, so you need to get paid into your home account, then transfer in dollars, then convert them into local currency, so you're still doing two forex transactions. Better than one for each purchase, but will not ideal. Also, it's still not a real local bank account, so all the problems wrt government and bills still apply.

The Transferwise Borderless page (see section "Coverage") says they provide a local bank ID in several countries (ABA/Routing in the US, SWIFT/BIC and IBAN in the EU etc), so it seems like it would be like a real local bank account?

I'm thinking this could be quite useful for digital nomads.

Oh, OK, I didn't realise you got a personal account number like that. I mainly used it for card transactions while traveling.

Not maintaining a foreign bank account is a non-trivial thing, equivalent to saying "just pay for everything in cash". In many European countries pretty much all routine bill payments are handled by direct bank transfer between local banks. The US banking system doesn't interface with this system.

https://cashmanagement.bnpparibas.com/currency/myr

"MYR is considered to be a restricted currency, which implies an inherent limitation to the tradability of this currency. Fund transfers in this currency are not allowed outside of Malaysia"

Lets say you work in Malaysia; your salary is paid in MYR as its legally required to be. You can't get a bank account with most banks because US passport - therefore you can't get a MYR bank account.

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