Baker & McKenzie Holds Briefing on Potential US Tax Trap
24 January 2013
Explaining US Citizenship by Derivation
Zurich, Switzerland, 24 January 2013 - Within the framework of the regular business briefings organized by Baker & McKenzie Zurich, Thomas Salmon and Daniel W. Hudson welcomed attendees to a briefing on the topic of U.S. citizenship by derivation, which poses as a U.S. tax trap for the unwary.
Mr. Hudson first explained some of the driving forces behind the heightened sensitivity to the determination of whether a client is a U.S. citizen, which included a brief overview and update on the Foreign Account Tax Compliance Act (FATCA). The final regulations under FATCA where released by the United States Internal Revenue Service last week, which are intended to provide further guidance for the implementation and operation of FATCA.
Mr. Salmon then explained how an individual can be a U.S. citizen by derivation, wherein a person with no other ties to the United States as from a U.S. citizen parent, is deemed a U.S. citizen and therefore a U.S. taxpayer. Mr. Salmon further discussed requirements to be considered a U.S. citizen by derivation. Mr. Salmon finished by highlighting the potential U.S. federal income, estate and gift tax consequences for a U.S. citizen.
The briefing finished with Mr. Hudson explaining that expatriation is one way for a U.S. citizen by derivation to relinquish their U.S. citizenship. Such explanation included the limitations to expatriation. Finally, Mr. Hudson and Mr. Salmon discussed some of the facts to keep an eye out in order to determine whether a client might be deemed a U.S. citizen by derivation.
For any questions about this press release, please contact:
Marnin Michaels (
+41 44 384 1208)
Thomas Salmon (
+41 44 384 1372)
Daniel W. Hudson (
+41 44 384 1290)