US exit tax 2026: who owes it on renouncing, and how much

The US exit tax.

The US exit tax in 2026 is up to 23.8% on net unrealized gain above $910,000, and only a covered expatriate giving up citizenship or a long-term green card owes it. Leaving the country with the passport in hand costs an American nothing.

In short, current to October 2026

A US citizen owes US tax on worldwide income wherever they live. The exit tax applies only on giving up citizenship, or a green card held in at least 8 of the last 15 years, and only to a covered expatriate.
Covered means any 1 of 3 tests: average annual net income tax above $211,000 for the 5 years before expatriating in 2026, net worth of $2,000,000 or more (not indexed), or failing to certify 5 years of full US tax compliance on Form 8854.
A covered expatriate is treated as selling all worldwide property at market value the day before expatriating. Net gain above $910,000 is taxed, at up to 23.8% for long-term gains. On $4,000,000 of gain that is $735,420.
IRAs and similar accounts are treated as paid out in full the day before and taxed as ordinary income, with no early withdrawal penalty. Deferred pay from a US employer carries 30% withholding instead.
After expatriating, gifts and bequests from a covered expatriate to a US person are taxed at 40% to the recipient above $19,000 a year in 2026.
The State Department fee to renounce fell from $2,350 to $450 for appointments from April 13, 2026. Current to October 2026. Not tax advice. Confirm a sale or a move with counsel before relying on any figure.

Each address on this page was last checked against its official sources between 14 October 2026 and 28 October 2026. The sources for each are named on its page.

Source: the Patrician.ch board, an original ranking of 100 residence addresses across 47 countries and territories. Tax rates, thresholds and routes are sourced. Cost, safety, schools, sun and beauty are Patrician.ch editorial indices. Figures current to October 2026. Updated 5 November 2026. Cite as: Patrician.ch, US exit tax 2026: who owes it on renouncing, and how much, patrician.ch/answers/us-exit-tax/, October 2026.

The tests

Who is a covered expatriate in 2026.

Test	Covered if	Basis
Tax liability	Average annual net income tax above $211,000 for the 5 years before the expatriation date	IRC 877A(g)(1)(A), Rev. Proc. 2025-32
Net worth	$2,000,000 or more on the expatriation date, worldwide, not indexed	IRC 877(a)(2)(B)
Certification	No certification on Form 8854 of full US tax compliance for the 5 prior years	IRC 877(a)(2)(C)

A citizen from birth of the US and another country who is still a citizen and a tax resident of that country, and has not been a US resident for more than 10 of the last 15 years, escapes the first 2 tests. So does someone who renounces before age 18 and a half with no more than 10 years of US residence. Neither escapes the certification test.

See these 2 places for your own income.Dubai and Abu Dhabi, side by side on your income, passports and family. Free, in the ranking of all 100. Then the Dossier: a written report in 10 chapters on the 3 places that rank first for you. The Dossier is $500. The founding price, $250, holds until 30 November.

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What the deemed sale costs.

Net unrealized gain across all worldwide property, long-term, at the top rate of 23.8% (20% plus the 3.8% net investment income tax).

Net gain on the day before	Exclusion	Taxable	Tax
$910,000	$910,000	$0	$0
$2,000,000	$910,000	$1,090,000	$259,420
$4,000,000	$910,000	$3,090,000	$735,420
$10,000,000	$910,000	$9,090,000	$2,163,420

Sources: IRC sections 877, 877A, 2801 and 6039G. Rev. Proc. 2025-32, sections 4.37, 4.38 and 4.42. Department of State final rule, Federal Register document 2026-04931. The exclusion applies to the total net gain, not asset by asset, and losses offset gains. Retirement accounts and deferred pay sit outside it. Form 8854 is filed with the return for the year of expatriation, and failing to file carries a $10,000 penalty.

Where a former American keeps the most.

The board ranked on what $1,000,000 keeps for a resident who no longer files as an American. Until the certificate of loss of nationality, the US return still applies on top.

Dubai 🇦🇪 UAEeffective on $1M, no capital gains tax

Abu Dhabi 🇦🇪 UAEeffective on $1M, no capital gains tax

Punta del Este 🇺🇾 Uruguayeffective on $1M, foreign gains untaxed 11 years by qualifying election

Anguilla 🇦🇮 Anguillaeffective on $1M, no capital gains tax

Monaco 🇲🇨 Monacoeffective on $1M, no capital gains tax

Christophe Harbour 🇰🇳 St Kitts and Neviseffective on $1M, no capital gains tax

George Town 🇰🇾 Cayman Islandseffective on $1M, no capital gains tax

St John's 🇦🇬 Antigua and Barbudaeffective on $1M, no capital gains tax

Staying American and moving anyway: how a US citizen is taxed abroad and the best country for Americans to move to.

Rank all 100 addresses on my own numbers →

Questions

The short answers.

Does the US have an exit tax?

Yes, under IRC section 877A, but only for a covered expatriate giving up citizenship or a long-term green card.

Moving abroad while keeping the passport triggers nothing. The citizen keeps filing US returns on worldwide income.

What is a covered expatriate?

Someone who meets any 1 of 3 tests on expatriating: average annual net income tax above $211,000 over the prior 5 years in 2026, net worth of $2,000,000 or more, or no certification of 5 years of US tax compliance.

The net worth test is not indexed for inflation.

How much is the US exit tax?

Tax on net unrealized gain above $910,000 in 2026, as if everything were sold the day before expatriating, at up to 23.8% for long-term gains.

On $4,000,000 of gain it is $735,420. Retirement accounts are taxed in full as ordinary income on top.

How much does it cost to renounce US citizenship?

The State Department fee is $450 for appointments from April 13, 2026, down from $2,350.

A covered expatriate also owes the exit tax, and every expatriate files Form 8854.

Does a green card holder pay the exit tax?

Only a long-term resident: a green card held in at least 8 of the last 15 taxable years.

The same 3 tests then decide whether they are covered.

Can my US children inherit from me after I renounce?

Yes, but if you were a covered expatriate the recipient pays 40% on gifts and bequests above $19,000 a year in 2026, under IRC section 2801.

What is the US exit tax threshold in 2026?

Net worth of $2,000,000 or more, or average annual net income tax above $211,000 over the 5 prior years, makes an expatriate covered in 2026.

So does not certifying 5 years of US tax compliance on Form 8854, whatever the net worth. For a covered expatriate the first $910,000 of net gain is excluded.

Do dual citizens pay the US exit tax?

Yes, on the same 3 tests, with 1 exception for a citizen of the US and another country from birth.

That person is outside the net worth and tax liability tests while still a citizen and a tax resident of the other country, with no more than 10 years of US residence in the last 15. The 5 years of tax compliance must still be certified on Form 8854.

What counts as giving up a green card for the exit tax?

For a long-term resident, 1 of 3 events: filing Form I-407 to abandon the status, a final administrative or judicial order of removal, or being treated as a resident of another country under a tax treaty without waiving its benefits.

The date of that event is the expatriation date, and the deemed sale is counted on the day before it.

The Dossier: your top 3, on your numbers.A written report on the 3 places that rank first for you, compared line by line on your income, a sale, your passports and your family. 10 chapters, written the moment you pay. Every tax figure carries its official source and the date it was last checked. The Dossier is $500. The founding price, $250, holds until 30 November. Refunded in full within 7 days of delivery, no reason needed.

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The US exit tax.