Boris Johnson bows to FATCA demand
London mayor Boris Johnson has agreed to pay a substantial tax bill to the US government despite earlier claiming that it was “outrageous” for the US to tax expat American citizens in an interview at the end of November last year.
Johnson was born in New York but left when he was five years old. However, he has yet to relinquish his US passport, and as such the US Internal Revenue Service has sought to claim tax on on a property sale.
The tax bill which he has agreed to pay is understood to relate to capital gains made from the sale of a house in North London, according to media reports.
Withers partner Richard Cassell said even the mayor of London has acknowledged that US citizens have to pay tax that is due as the price of the passport.
“The IRS expects tax on house sale gains over the exclusion. The US government just wants to help taxpayers settle up with Uncle Sam.”
On tour in America promoting his biography of Winston Churchill, Johnson had been asked whether he would pay the tax, to which he said: “No is the answer. I think it is absolutely outrageous. I haven’t lived in the United States since I was five years old. I pay the lion’s share of my tax, I pay my taxes to the full in the United Kingdom where I live and work.”
This refusal to comply with Foreign Account Tax Compliance Act (FATCA) was subsequently labelled “noble” by deVere Group chief executive Nigel Green.
Green said at the time that Johnson had taken a “brave” stance against “this fatally flawed, imperialistic and economically dangerous law”.
The US Treasury Department claims the number of Americans renouncing their citizenship rose by 220% in 2013, with many experts claiming this is a direct result of FATCA.
Johnson is due to visit the US next month.