The Internal Revenue Service has announced the annual inflation adjustments for the tax year 2015. The items of greatest interest to those Americans living in the UK follow:

  1. The basic exclusion amount from US federal estate tax on the estate of a US citizen decedent who dies in 2015 has been increased to US $5,430,000 from US $5,340,000.
  2. The exclusion from US federal gift tax for gifts made to a spouse who is not a US citizen has been increased to US $147,000 in 2015, up from US $145,000 in 2014.
  3. The foreign earned income exclusion is now over six figures. This exclusion amount has risen to US $100,800 for 2015, which is up from US $99,200 for 2014.
  4. For US citizens considering renouncing citizenship in 2015, an individual will be a ‘covered expatriate’ if his or her ‘average annual net income tax’ for the five taxable years ending before the expatriation date is more than US $160,000.
  5. For covered expatriates in 2015, the amount of gain that is excludible from the deemed sale of his or her assets is US $690,000.
  6. The annual exclusion from US federal gift tax remains unchanged at US $14,000 per donee for 2015.