Facebook Founder Renounces U.S. Citizenship, Saves Taxes
By Attorney David M. Grant
It was announced on Bloomberg.com earlier this week that one of Facebook’s founders, Eduardo Saverin, renounced his US citizenship last September. The article is very good at explaining Mr. Saverin’s savings as related to the capital gains tax, but fails altogether to point out his huge potential transfer tax savings as related to the Gift Tax, Generations Skipping Transfer (GST) Tax, and Estate Tax.
While he undoubtedly paid the “exit” tax or the expatriation tax (see the Heroes Earnings Assistance and Relief Tax Act of 2008), all future growth and appreciation in Saverin’s estate will no longer be subject to the U.S. gift, GST and estate tax system. While most individuals do not consider full renunciation of their U.S. citizenship, many people are looking for ways to limit transfer tax liability.