What actually gets taxed when I stop being resident?
The gain accrued up to the day residence ends, on the assets the rule reaches, computed as though those assets had been sold at market value on that day. Nothing is sold, so nothing is received, and the charge falls on unrealised growth. The decisive word there is reaches, because not every asset is inside the charge. Some are excluded and instead stay connected to the departure country's tax system, so that a later, real sale is taxable there even though you have left. Which of your assets falls into which group is the first thing to determine, since it decides both the charge now and the filings later.
Which assets are inside the departure charge and which are not?
That split is the whole planning question, and it differs by system, so it is settled asset by asset rather than from a general rule. The pattern to look for is this. Assets a departing country can no longer tax once you have gone tend to be brought into the charge on departure, while assets over which it keeps a taxing right, typically those with a continuing local connection such as land and buildings, and certain pensions and retirement plans given their own treatment, are commonly left outside and taxed on an actual sale instead. Get the classification in writing for each holding, with the reasoning, before you go.
Can I leave and deal with the departure tax afterwards?
You can file afterwards, but you cannot plan afterwards, and the planning is most of the value. Before departure you can choose what to sell and in what order, obtain valuations while the assets and their records are still to hand, settle the departure date itself where the facts allow it, and check whether any deferral of payment exists and what arranging it requires. Once you have gone, those choices are behind you and what remains is reporting the consequences of the date that happened. The distance between a planned departure and a merely reported one is usually large and almost entirely avoidable.
What if my ties never really broke and I stayed resident?
Then there is no departure charge, and filing as though there were is a problem of its own. Residence ends on the facts, not on a flight or a form. A dwelling kept available, a spouse and children remaining, local employment continuing, memberships, vehicles and accounts left in place can each leave residence running. Errors here run both ways. Reporting a departure that did not happen concedes a charge that was never due and unsettles the years after it. Assuming residence continued when it had in fact ended leaves a departure year unreported. Decide the question on the evidence, and keep the evidence.
Do I still have to file in the country I left?
Usually yes for the year you left, and often for later years too. The departure year needs a return covering the year up to the departure and the charge arising on it. After that, any asset that stayed connected to the departure country's tax system can create filing obligations of its own when it produces income or is sold, and withholding on those payments does not always settle the matter. Work out at the point of departure which continuing obligations each retained asset carries. That is far cheaper than reconstructing several unfiled years when the asset is finally sold.
How do I value assets for departure with no market price?
With a valuation prepared at the time, for the departure date, that explains its own basis. Unquoted shares are built from the company's accounts, the terms of recent transactions in the same class and any shareholders' agreement. Land needs someone who values in that market to state the comparables used. Interests in private funds or partnerships need the manager's or the partnership's own figures for the relevant date. The discipline is to obtain all of this while the records are still accessible to you. Valuing a foreign private asset for a past date, at a distance and years later, is the expensive version of the same job.
Which US states have an exit tax?
None imposes a tax on the act of leaving. What people are usually describing is one of two real things. First, a state continuing to tax income sourced to it after you go — deferred compensation, equity vesting on earlier work, gains on property there — and testing hard whether you genuinely changed domicile. Second, the federal expatriation regime, which is about giving up citizenship or long-term residence, not about moving between states. See departure tax against exit tax.
Do American citizens living abroad have to pay taxes?
American expats and green card holders need to file US returns for life, and many of them pay little or no US tax once the relief is applied — but the filing is what unlocks the relief, so the two questions have different answers. The exclusion for foreign earned income, the credit for foreign tax already paid and the treaty between the two countries between them usually leave the total at roughly the higher of the two countries' tax rather than the sum. Skip the return and none of it applies. See Americans abroad.
