US Exit Tax Calculator

There is no flat rate. If you are a covered expatriate, all your worldwide assets are treated as sold at fair market value the day before you expatriate, the first $910,000 of net gain is excluded for 2026, and the excess is taxed at the rates that would have applied to a real sale — usually 15% or 20% long-term capital gains plus the 3.8% net investment income tax. On $1.8m of unrealised gain with $250,000 of IRA balances, a single filer with no other income lands at roughly $253,500. If you are not a covered expatriate, the exit tax is nil.

Only covered expatriates. You are covered if you meet any one of three tests on the day you expatriate: your net worth is $2,000,000 or more; your average annual net US income tax for the five tax years ending before the year of expatriation exceeds $211,000 for a 2026 expatriation; or you cannot certify on Form 8854 that you have complied with all US federal tax obligations for the preceding five years. Most people who renounce meet none of them and pay nothing.

$910,000 of net gain, up from $890,000 for 2025. The figure is indexed annually and was set for 2026 by Revenue Procedure 2025-32. It applies to the net result of the deemed sale — gains less losses across all your assets — and it cannot reduce the result below zero. For a married couple who both expatriate, each person has their own $910,000 exclusion against their own assets.

Your home is within the deemed sale like any other asset, so the unrealised gain counts. If it has been your principal residence and you meet the ownership and use tests, the section 121 exclusion of up to $250,000 of gain — $500,000 for a married couple filing jointly — can apply first, and only the remainder feeds into the mark-to-market calculation. A UK home is treated exactly the same way as a US one; the currency movement between purchase and expatriation is part of the gain.

Not under the mark-to-market rules. A 401(k) is generally eligible deferred compensation, which is excluded from the deemed sale. Instead, the plan applies 30% US withholding to payments made to you after expatriation, and you must waive any treaty benefit that would reduce that withholding. The balance still counts towards the $2,000,000 net worth test, so it can make you a covered expatriate even though it escapes the deemed sale.

An IRA is a specified tax-deferred account, which means it is treated as if the entire balance were distributed to you on the day before expatriation. The whole amount is ordinary income in that year, taxed at your marginal rates, but the 10% early distribution penalty does not apply. This is one of the harshest parts of the regime for anyone with a large traditional IRA, and it is the main reason a Roth conversion strategy is sometimes considered years ahead of an expected expatriation.

Yes, but only to long-term residents — those who held a green card in at least 8 of the previous 15 tax years. Abandon the card before hitting 8 years and the expatriation regime does not apply at all, whatever your net worth. Once you are a long-term resident, the same three covered expatriate tests apply exactly as they do to citizens, and Form 8854 is required either way.

The State Department fee is $450 for appointments on or after 13 April 2026, reduced from $2,350 under a final rule published on 13 March 2026. That covers administrative processing of the Certificate of Loss of Nationality. Any exit tax, plus the cost of bringing five years of filings up to date, sits on top — and for anyone near the thresholds those costs dwarf the consular fee.

File everything. The certification test is the only one of the three you fully control, and it catches people with modest assets who assumed the wealth tests were the whole story. Beyond that, the levers are gifting down net worth below $2,000,000 before expatriation using the annual exclusion and lifetime exemption, timing expatriation for a year after a low-tax five-year window, and realising losses to reduce the net unrealised gain. All of these need to happen before the expatriation date, not after.

Form 8854 is the Initial and Annual Expatriation Statement. It establishes your expatriation date, reports your net worth and asset detail, and carries the five-year compliance certification. It is filed with your income tax return for the year of expatriation — usually a dual-status return — by that return's due date including extensions, with a copy sent separately to the address in the instructions. Failing to file it makes you a covered expatriate automatically, regardless of your net worth.

You cannot certify, so you would be a covered expatriate the moment you renounce. The usual fix is the Streamlined Foreign Offshore Procedures, which allow three years of returns and six years of FBARs to be filed penalty-free where the failure was non-willful. That work has to be completed before the consular appointment. Renouncing first and filing afterwards does not repair the certification — the test is applied as at the expatriation date.

Yes. Net worth is measured on everything you own worldwide at fair market value, so a UK defined-contribution pot counts at its value and a defined-benefit entitlement counts at an actuarial value. Combined with equity in a London property, UK pensions are the single most common reason an otherwise ordinary household clears the $2,000,000 line. Their treatment inside the exit tax calculation is different again and depends on the specific plan.

An ISA is transparent for US purposes, so you are treated as owning the underlying investments. UK-domiciled funds inside it are almost always PFICs, and a deemed sale of a PFIC brings the section 1291 excess distribution rules with it — the gain is spread back over your holding period with an interest charge, rather than being taxed as a clean capital gain. For UK-resident Americans this frequently produces a larger number than the headline mark-to-market figure suggests, and it is the main reason to model a UK balance sheet properly rather than in the aggregate.

If you left as a covered expatriate, section 2801 imposes a tax at the highest gift or estate tax rate — currently 40% — on any US citizen or resident who receives a covered gift or bequest from you. The tax falls on the recipient, not on you. For families with US-based children this long tail is often more expensive over time than the exit tax itself, and it is a strong argument for restructuring below the thresholds where that is realistic.

The tests are applied per person. Each spouse measures their own net worth against $2,000,000 and their own share of the five-year average tax, and each has their own $910,000 gain exclusion. Where assets are held jointly, each spouse counts their share. In practice this means one spouse can be a covered expatriate while the other is not, and it is worth checking whether the ownership split of a jointly held property or portfolio can be adjusted well ahead of any expatriation date.