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article imageMillionaire socialite Denise Rich renounces US citizenship

By JohnThomas Didymus     Jul 10, 2012 in Lifestyle
Denise Rich, wealthy socialite and political fundraiser, and former wife of the pardoned billionaire commodities trader Marc Rich, has given up her US citizenship.
ABC News reports Rich, 68, is a grammy-nominated songwriter who wrote songs including "Don't Waste Your Time," a duet sung by Mary J. Blige and Aretha Franklin, and nominated for a Grammy in 2000. She is a prominent figure in Democratic circles and among European royalty. Reuters reports that her lawyers say she renounced her US passport in November.
Rich's maiden name is Denise Eisenberg. She was born in Worcester, Massachusetts. Her name appeared on April 30 on the Federal Register's quarterly list of Americans who renounced their US citizenship, and permanent residents who gave up their green cards, Reuters reports. In 1983, Rich's billionaire ex-husband and commodities trader Marc Rich, fled the US after he was indicted on charges of tax evasion, fraud, racketeering and illegal trading of oil with Iran.
Marc received a presidential pardon in 2001. A 2002 House of Representatives committee concluded after an investigation that Marc Rich had influenced President Clinton's decision to grant pardon through donations to the Clinton library and campaign.
Marc and Denise divorced in 1996.
According to Reuters, tax lawyers say that by giving up her US citizenship, Rich will likely save tens of millions of dollars in US taxes. Her lawyer Michael Heidt of Hollywood, Florida, says she has Austrian citizenship through her deceased father.
CBS News reports that Rich's lawyer said she moved "so that she can be closer to her family and to Peter Cervinka, her long-time partner." Cervinka, according to ABC News, is a wealthy Austrian, a property developer, resident in London. ABC News reports Rich plans to join Cervinka in London where her two daughters live.
Rich owns several properties including a mansion in Aspen, Colorado. While she will escape future US taxes after renouncing her US citizenship, she will not escape all current taxes. Reuters reports that in 2008, the US Congress imposed an expatriation tax on persons with a net worth of more than $2 million who decide to renounce their US citizenship or permanent residency.
According to CBS News, Rich will be able to take advantage of Austrian tax laws which gives generous tax breaks to citizens who live half the year out of the country. According to the Daily Mail, Rich will have to pay "exit tax" in the US on property she owns around the world. But as an Austrian citizen, she will get tax breaks for spending half of the year abroad. Also, while in the UK, she will qualify for "non-domiciled" status which the Daily Mail describes as the "coveted tax status of the international private jet set."
As a "non-dom" in the UK, she will not have to pay income and capital gains tax on her earnings outside the country. Her earnings outside the UK will only be taxed if they are remitted to the UK.
Reuters reports she is the latest of a growing list of wealthy Americans who have renounced their citizenship. Recently, Eduardo Saverin, co-founder of Facebook, gave up his US citizenship and became a citizen of Singapore. Singapore is an offshore tax haven.
ABC News reports that on May 17, Senators Schumer (D-N.Y.) and Bob Casey (D-Pa.), announced the “Ex-PATRIOT” Act (“Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy) in response to Saverin’s move. The act prospes re-imposing taxes on expatriates even after they leave the US. The act proposes imposing a 30 percent tax on the capital gains of people who renounce their US citizenship.
According to Reuters, nearly 1,800 citizens and permanent residents of the US expatriated last year. According to the official records, this is the highest number in any year since the data was first compiled in 1998.
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