Glossary
US and UK tax terms, in plain English.
Short, sourced definitions of the terms that come up most when you file in both countries. Each links to the guide or tool that goes further. Figures are for the 2025 US tax year; reviewed 9 November 2026.
- Accidental American
- Someone who is a US citizen, usually by birth in the US or to a US parent, without having lived there as an adult, and who may not know they have US filing obligations. Read more
- Bona fide residence test
- One of two ways to qualify for the Foreign Earned Income Exclusion: being a resident of a foreign country for an uninterrupted period that includes a full calendar year. Read more
- FATCA
- The Foreign Account Tax Compliance Act. It makes foreign banks report US account holders to the IRS (through HMRC in the UK) and makes US taxpayers report specified foreign assets on Form 8938. Read more
- FBAR (FinCEN Form 114)
- The annual report of non-US financial accounts filed with the US Treasury's FinCEN when their combined highest balances exceed US$10,000. It is separate from the tax return. Read more
- FEIE (Form 2555)
- The Foreign Earned Income Exclusion, which lets a qualifying US person exclude foreign earned income up to an annual limit ($130,000 for 2025) from US income tax. Read more
- Foreign Tax Credit (Form 1116)
- A dollar-for-dollar credit against US income tax for income tax paid to another country, limited to the US tax on the foreign-source income. Unused credit carries back one year and forward ten. Read more
- Form 8938
- The Statement of Specified Foreign Financial Assets filed with the US return when foreign assets exceed thresholds that are higher for people living abroad ($200,000 at year end or $300,000 at any time for single filers). Read more
- Form 8833
- The disclosure filed with a US return when you take a position that relies on a tax treaty, such as treaty treatment of a UK pension. Read more
- PFIC (Form 8621)
- A passive foreign investment company: most non-US funds, including many UK unit trusts, OEICs and ISA funds. PFICs carry punitive default US tax rules and annual reporting. Read more
- Physical presence test
- The other way to qualify for the FEIE: being outside the US for at least 330 full days in any 12-month period. Read more
- Saving clause
- The treaty article that lets the US tax its citizens as if the treaty did not exist, apart from listed exceptions. It is why the US–UK treaty does not remove US filing. Read more
- Self Assessment (SA100)
- The UK's annual personal tax return for the tax year ending 5 April, filed online by 31 January. Read more
- Split-year treatment
- A UK rule that divides the tax year into a UK part and an overseas part in the year you arrive in or leave the UK, when specific conditions are met. Read more
- Statutory Residence Test (SRT)
- HMRC's test of UK tax residence, based on days spent in the UK, automatic tests and UK ties such as family, accommodation and work. Read more
- Streamlined Foreign Offshore Procedures
- The IRS route for non-wilful US taxpayers abroad to catch up: three years of returns, six years of FBARs and a Form 14653 certification, with no penalty for those who qualify. Read more
- Totalization agreement
- The US–UK social security agreement that generally means you pay into only one country's system on the same earnings, evidenced by a certificate of coverage. Read more
- W-8BEN
- The form a non-US person gives a US payer to certify foreign status and claim treaty-reduced withholding on US income. Read more
- W-9
- The form a US person gives a bank or payer to certify US status and taxpayer identification number. US individuals leave the FATCA exemption code blank. Read more
Get started
Tell us your situation
Where you live, which years are involved, what has been filed, and every source of income in each country. We reply by email within two working days with what is needed and a written fee. No free consultations, and no work starts before you have the quote.