Published 17 June 2026 · Updated 7 November 2026 · 4 min read
Most people who move to the UK stop filing in the country they left. Americans and green card holders do not. The move adds a UK system on top of a US one that never goes away, and the first year sets the pattern for every year after it.
Before you leave the US
Get current. Moving does not erase past US obligations. If returns or FBARs are missing, consider the Streamlined procedures before you go rather than after.
Deal with your state. Some states (California, New York, Virginia and South Carolina among them) keep taxing former residents who have not clearly broken residency. Closing the state position deliberately, with evidence, is cheaper than arguing about it later.
Use the last US earned-income year. Contributions to a 401(k) or IRA need US taxable compensation. If you plan to use the Foreign Earned Income Exclusion abroad, this may be your last straightforward year to contribute.
Check your brokerage. Several US brokers restrict or close accounts for non-US residents, and some stop fund purchases. Ask before you move. And do not open an ISA or buy UK funds when you arrive: UK-domiciled funds, ETFs, unit trusts and OEICs are passive foreign investment companies (PFICs) for US purposes, with punitive tax and heavy reporting on Form 8621. US-listed ETFs are the usual answer.
Arriving: your UK status
Statutory Residence Test
UK residence for a tax year is decided by the Statutory Residence Test. 183 days in the UK in a tax year makes you resident automatically; fewer days can still make you resident through the automatic UK tests (a home in the UK, full-time work in the UK) or the sufficient-ties test. Residence applies to the whole tax year unless split-year treatment applies, which it usually does in the year you arrive to live or work in the UK.
The four-year foreign income and gains regime
From 6 April 2025 the old remittance basis is gone. If you were non-UK resident for the ten tax years before arriving, you can claim relief from UK tax on foreign income and gains for your first four years of residence. Because the US taxes that same income anyway, the claim changes which country taxes what rather than removing tax altogether, and it should be modelled against the US return before it is made.
Practicalities
Apply for a National Insurance number early. If you are self-employed, register for Self Assessment. Open UK bank accounts knowing that once their combined highest balance passes US$10,000 you have an FBAR to file for that calendar year.
Your first US return from the UK
FEIE or Foreign Tax Credit. In a higher-tax country the credit usually wins: it covers investment income, preserves IRA eligibility and the refundable Child Tax Credit, avoids the stacking rule and creates carry-forward credit. The exclusion has a five-year lock-out if revoked. Run the estimator and read FEIE vs Foreign Tax Credit.
The move year is partial on both sides. Your FEIE physical presence period can straddle two US tax years and UK split-year treatment applies to the UK year. Both returns need to be planned together.
Buying a UK home
Stamp Duty Land Tax is a UK cost with no US credit. On a later sale, UK capital gains tax (18% or 24% for residential property) is creditable against US tax; the US Section 121 exclusion of US$250,000 (US$500,000 joint) may apply if the home qualifies as your main residence. Two things catch people out: the US calculates the gain in dollars, so currency movement is part of it, and repaying a sterling mortgage after the pound has fallen can produce a taxable exchange gain in the US.
UK workplace benefits
Employer pension contributions are governed by the treaty's pension article and should not be assumed to be deferred without checking. Private medical insurance paid by a UK employer is a taxable benefit for US purposes. Relocation payments are partly exempt in the UK (£8,000) but may be taxable in the US.
Every year from now on
- Form 1040 on worldwide income, with Form 2555 or Form 1116
- FBAR when the US$10,000 aggregate test is met
- Form 8938 when the abroad thresholds are met
- Form 8833 for treaty positions that require disclosure
- Form 5471 or 8865 if you own a UK company or LLP; Form 3520 for UK trusts and large gifts
- UK Self Assessment where you have untaxed, foreign or self-employment income, or HMRC asks
The first return from the UK is the one to get right. Elections made then carry forward.
Written by the US UK Expat Tax advisory team. Last reviewed 7 November 2026 · Figures relate to the 2025 / 2025-26 tax year unless stated.
Primary sources checked
General information, not personal tax advice. Rules and thresholds change; we confirm the position for your facts before any work.