Should I get my children USA passports? Post Reply

[KEMS]

I’m British but my husband is American. Our children were born in the UK and currently have British passports but they are eligible for dual citizenship and we could get them USA passports in addition to the British ones.

Has anyone done this and can you explain the pros and cons to me?

My current understanding is that the advantage would be that they could live and work in the USA if they ever chose to. However, disadvantages seem to be that the USA operates worldwide taxation so they’d forever more have to submit US tax returns and could become liable to pay tax there on worldwide earnings if they earned enough to meet a threshold!

Are there any other advantages that I’m not seeing? Are there eg grants for US citizens to pay university tuition fees with? Also would their child ISAs suddenly become liable to USA taxation?

I feel quite confused about it. Don’t want to miss the chance to do it if will be net beneficial but I’m not currently convinced it is a good idea! Any experience you could share would be helpful.

[Goldhawk]

The main con is the taxation - unsure about the child ISA treatment but if your husband uses a tax advisor for his returns they may able to advise him

It makes college in the USA easier but no cheaper

[pkmang]

The biggest advantage is if they want to live and work with America one day. It's hard to know what they want to do in the future so I always think the more options the better.

As you say, taxation is a minefield.

One thing to think about is that applying is slightly onerous because of the physical presence test. So if your children are young it's probably very useful to have your husband apply on their behalf. If you wait until they are adults and your husband has passed away, applying may be very difficult. It's been a decade since I did it, but I had to provide a spreadsheet of every day I was in the US since birth to apply for my children and provide evidence to satisfy the consular officer it was true. That mostly was being quizzed about the school mascot of my primary school.

[MuminBalhamSW]

Maybe you might want to contact a company such as Moody’s who specialise in this area, regarding the pros and cons? The USA and Eritrea are the only two countries on the planet who tax by nationality rather than residency, and tax paperwork needs to be done every year. There are also differences in what can be taxed and what can’t. It can be a very, very difficult and expensive thing to undo, if it isn’t right for them. Moody’s can also advise on working in the US without citizenship. They do recorded seminars that highlight some of this. Good luck, and my advice would be to do your homework before doing anything hasty you might regret.

[AJ2012]

They are already dual nationals and are already liable to us tax I am sorry to say. Your questions about the implications are well founded and yes if you do it I would consider getting rid of your child ISAs beforehand. Technically they would be PFICS which are not great on us tax returns. For this reason my dual national children have no isas. I have chosen compliance.

Getting a us passport is not the same as entering the us tax system but could make it more likely that they would need to (although I have no idea on this!)

How enforceable the IRS will find things if they don’t “know” about your children is another issue. There is a Facebook group for this and not everyone recommends that hidden Americans enter the tax system. I don’t think you need to panic but us tax professionals will definitely try to do that.


Overall I still have strong connections to the USA and have registered my children. It does make financial planning a Complete pain in the a**.

There are loads of FB groups on us taxatiin in the uk so it might be worth a quick dive into that.

[Ali4kids]

I was born in the UK to an American mother. She got me the passport. I just spent £25k to rescind my citizenship as I was being contacted by my bank to declare offshore accounts, even though my only bank account is a UK account, it is of course considered foreign by the IRS. All profit on property sale or ISA is taxable by the IRS. Each ‘foreign’ account needs to be declared. I wish I’d never been flagged as a citizen, I have always lived worked and paid tax in the UK.
At the end of the day, your child can always apply for the passport if and when needed.

[JFP]

If your children ever intend to travel to the USA, by law, if they are US citizens, they are required to enter on a US passport.
Whether or not they are “officially” citizens I suppose may depend on if your husband registered their births with the embassy, got them their US birth certificates and social security numbers.
(I am American, with two dual citizen children.) My experience is many years old now, but I’m sure there are some good Facebook pages for expats that might be helpful.
There is some useful information on the US embassy website about how to go about getting them passports.

[rainycitymum]

I'm a US citizen and have nearly become a citizen here. One of my children was born here but will not be a citizen here until we all are. Having seen this topic come up a lot and looked into the law....the children are already default U.S. citizens (I hope your husband is paying his U.S. taxes, and if he is then he is required to declare them as well). They have to pay u.s. taxes already even without passports. Most Americans do not have a passport but they already pay their taxes. Your children will have until they're 18 to easily get their child born abroad application in. It's much harder after 18. Your husband will need proof of time in the u.s. we brought our old passport and college transcripts in. They barely looked at them....some people go crazy with this information but you just need to show a decent amount of time in America. We brought bank statements as well but again, they didn't even look. In order to travel into America they have to travel on an American passport, it is against the law for them to enter on an ESTA and while some have gotten away with it, others have not and it is a very unpleasant experience. They will have to enter UK on their British passports. We pay our u.s. taxes and work here but we get money back so it can be a good thing! Let me know if you have anymore questions.


Also I want to add they won't pay taxes on income here. It's called UK/USA double taxation convention 2001.

There are some drawbacks like ISAs, remortgage (if GBP is lower than it was at sale they have to pay phatom gains), house sale, inheritance tax, bonds etc.

[namaste1702]

Hello @Kems,

I would get some legal advice, as your children may already be considered US citizens by law regardless of whether they have passports or not and that would mean they need to meet all the obligations of being a US citizen, as has already been mentioned. I was born outside of the US to an American parent.

@Ali4kids, is there any chance you could recommend who helped you rescind as I am looking to do the same?

@MuminBalhamSW do you have a personal experience of working with Moodys? I just attended one of their seminars and have been checking reviews but am getting mixed messages, so would love to hear from personal experience if anyone has any, positive or negative. 

Good luck @Kems. Thanks everybody 

[Umanyc]

We have dual citizenship but opted not for UK
As we can be in the Uk and did not want to spend £2000 on a passport with no advantage for us

Regards passport if you opt for it
Yes taxation but you have this choice till 18 if I am correct voting right
So your advantage would be living, studying and work and they can choose till they are adult if in that time no intent to do so you surrender passport - as well big task but I think worth it!

As applying - your husband is the American so he is the main applicant
I myself I’m a green card holder and husband American
We applied straight after birth I thought was a fairly easy process just lot of paperwork and if you miss something they send you on your way again! But same for other passports!

Your husband will need to be there but you as well for the appointment !

Renewals I have done myself with a certified letter for my husband !

You will need the UK birth certificates certified for use for passport application!

Good luck!

[Umanyc]

We have dual citizenship but opted not for UK
As we can be in the Uk and did not want to spend £2000 on a passport with no advantage for us

Regards passport if you opt for it
Yes taxation but you have this choice till 18 if I am correct voting right
So your advantage would be living, studying and work and they can choose till they are adult if in that time no intent to do so you surrender passport - as well big task but I think worth it!

As applying - your husband is the American so he is the main applicant
I myself I’m a green card holder and husband American
We applied straight after birth I thought was a fairly easy process just lot of paperwork and if you miss something they send you on your way again! But same for other passports!

Your husband will need to be there but you as well for the appointment !

Renewals I have done myself with a certified letter for my husband !

You will need the UK birth certificates certified for use for passport application!

Good luck!

[rutherfordon]

Having dual citizenship does open up opportunities, like potential work and study options in the USA. However, you're right to point out the taxation complexities. Worldwide tax reporting can be a headache.On the bright side, having a US passport might come with advantages like access to grants or scholarships for education in the US. It's worth checking into those possibilities. Also, keep in mind that each passport has its own perks and downsides, so weigh them carefully.And about those potential complexities, I get what you mean. Life's full of unexpected twists, and it's good to have options. Just remember, should anything unusual arise, there's even the option to buy fake ID online temporarily.

[Schoolquestions]

Welcome to a minefield! My kids have three passports. Spanish here, American husband who then got a British passport. To us was about options and my husband really wanted his children to have it. Did it when they were 10 days old but certainly my husband spent some time filing up forms to confirm he could pass citinzenship to his children (there is a set of rules based on how long he lived on the states). Filing taxes is painful for him but to be fair as long as you live in countries with tax agreements the tax you really pay is very low but the filing itself can take a toll. He keeps a lots of assets in the US so makes sense for example when they inherit to have a passport and social security number to mine around capital. As mentioned before they are already liable I’m afraid..research what happened to Boris Johnson who happened to be born there, hence considered American.

[IrenaP]

As somebody above said, you really have no choice. The child/ren already is American if your American husband has been "physically present" in the U.S. before the child's birth for a total period of at least five years, and at least two of those five years were after the U.S. citizen parent's fourteenth birthday.

If this is the case your child is a citizen of the US and BY LAW will not be able to travel to the US without American passports.

To do means you need to register their birth with the US embassy.

And yes your husband - if he is American - by law needs to file a tax return every year. He may be entitled to child benefit though!

 

[IrenaP]

As somebody above said, you really have no choice. The child/ren already is American if your American husband has been "physically present" in the U.S. before the child's birth for a total period of at least five years, and at least two of those five years were after the U.S. citizen parent's fourteenth birthday.

If this is the case your child is a citizen of the US and BY LAW will not be able to travel to the US without American passports.

To do means you need to register their birth with the US embassy.

And yes your husband - if he is American - by law needs to file a tax return every year. He may be entitled to child benefit though! I would be surprised if your child owes tax right now...obviously depends on your financial situation. There is a threshold.