London Mayor Is Poster Boy for Expat Tax Woes

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Boris Johnson, the mayor of London, is a flamboyant Conservative British politician and commentator known for his unruly mop of blond hair, his potential as a successor to Prime Minister David Cameron and his new book celebrating Winston Churchill's legacy on the 50th anniversary of his death.
 
Recently, the 50-year-old Mr. Johnson, who holds dual U.S./U.K. citizenship, complained that the U.S. is "trying to hit" him for taxes on the sale of his London home, even though he hasn't lived in the States since he was five.
 
In an interview with NPR about Churchill, Mr. Johnson called his U.S. tax bill "absolutely outrageous," after a listener asked about his citizenship status. When pressed as to whether he would pay, Mr. Johnson said, "No is the answer...why should I?...I pay my taxes to the full in the United Kingdom, where I live and work." These taxes are often at higher rates than in the U.S., he added.
 
Mr. Johnson's case is a perfect illustration of the dilemmas faced by many of the 7.6 million U.S. citizens living abroad as a result of U.S. authorities' five-year campaign against secret offshore accounts. 
 
The U.S. also is among the very few nations that tax nonresident citizens on their world-wide income--which Mr. Johnson called "this incredible doctrine of global taxation." While tax law and treaty provisions alleviate some problems caused by Uncle Sam's long reach, many gaps and pitfalls remain.
 
Editor's Note: The UN has condemned one country for “using extortion, threats of violence” to collect taxes from its nonresident citizens. It then turns a blind eye to another country doing exactly the same thing…but much worse. Can you guess these countries? See this IM article for more
 

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