Denise Rich Dumps Citizenship to Save on Taxes
Denise Rich is using an unusual strategy to save money - she renounced her U.S. citizenship.
Rich, a Massachusetts-born songwriter and socialite, recently appeared under her maiden name 'Denise Eisenberg' in a quarterly report of Americans who gave up their citizenship.
She has Austrian citizenship through her father, according to Reuters. Her partner Peter Cervinka is also Austrian and her daughters both live in London. She plans to live primarily in London while maintaining Austrian citizenship to "be closer to her family" in a statement made to the press.
She'll also be saving a lot of money in taxes by leaving her U.S. passport behind.
As a U.S. citizen, Rich would have to pay tax on all her worldwide assets, including foreign homes and investments. By renouncing her U.S. citizenship, she is off the hook for future U.S. taxes.
Austria also taxes worldwide assets but according to Reuters they give a tax break to citizens who live abroad at least half of the year.
This doesn't mean that Rich is getting off scot-free.
The U.S. charges an expatriation tax on individuals with more than 2 million in assets at the time they renounce their citizenship. So she's still going to pay one last round of taxes.
Rich isn't the only celebrity to renounce her U.S. citizenship recently. Eduardo Saverin, a Facebook co-founder, gave up his passport in May and became a citizen of tax-haven Singapore.
In response to Saverin's expatriation, two senators are attempting to punish rich ex-Americans. Charles Schumer and Bob Casey introduced a bill that would ban wealthy individuals from re-entering the U.S. after giving up their American citizenship.
If that bill goes anywhere, it could also affect Denise Rich. But in the meantime, she seems to be doing just fine without her U.S. citizenship.
- Socialite-Songwriter Denise Rich Renounces Citizenship (ABC News)
- Dual Citizenship (FindLaw)
- Facebook Co-Creator Eduardo Saverin Renounces US Citizenship Before IPO (FindLaw's Technologist)