The founder of a prominent wealth management firm says the Mayor of London, Boris Johnson, is noble and brave to refuse to pay his US
tax bill under the Foreign Account Tax Compliance Act (Fatca).
Johnson, who was born in New York, has a US passport as well as a British one. Under Fatca, he is liable for capital gains tax on the sale of a house in London, as well as potentially other fines and penalties. He recently said on US radio that he would refuse to pay the tax, which he described as “outrageous”.
“Boris Johnson’s noble and brave stance against this fatally flawed, imperialistic and economically dangerous law, means he is legally in the wrong, yet morally he is right,” says Nigel Green, founder and chief executive of deVere Group.
Fatca is intended to stop Americans dodging taxes by hiding their wealth overseas, but it has proved controversial because it extends to all American passport holders, even those who have only a tenuous link to the US.
Many asset and wealth managers dislike the act because of the reporting requirements it imposes on firms with American clients who live outside the US. Some firms have even ceased doing business with American clients to avoid the extra administrative costs.
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