Moving to the UK from the US adds a second tax system without removing the first: the IRS keeps taxing you on worldwide income as a citizen, and HMRC starts taxing you once you are UK resident. The work is done before you fly — accounts, funds, state residency and the timing of gains. UK tax for US citizens begins here.
Almost every expensive mistake we see from new arrivals was locked in during the first six months. Most of them were avoidable with a checklist and a few weeks' notice.
Moving to the UK from the US: when UK tax starts
UK residence is decided by the statutory residence test. You are automatically resident if you spend 183 days or more in the UK in a tax year, if your only home is in the UK for 91 consecutive days and you are there on at least 30 days, or if you work full-time in the UK over a 365-day period. GOV.UK sets out the tests on its residence page.
If you arrive part way through the UK tax year, split-year treatment usually divides it into a non-resident part and a resident part, so UK tax on foreign income only runs from arrival. The UK tax year starts on 6 April, so an arrival in March and one in May fall in different years.
The four-year FIG regime
New arrivals who have been non-UK resident for at least ten consecutive tax years can claim the four-year foreign income and gains regime, which removes UK tax on foreign income and gains for their first four years of residence. GOV.UK explains who qualifies in its guidance on the 4-year FIG regime.
For a US citizen the benefit is narrower than it looks. The US still taxes the same income, and claiming costs the UK personal allowance and capital gains annual exempt amount. It is covered in detail in the foreign income and gains regime.
Before you leave the US
| Item | Why it matters | Action before the move |
|---|---|---|
| US ETFs and mutual funds | Most are offshore funds for UK purposes without UK reporting status, so gains are taxed as income | Review holdings; consider realising gains while non-resident |
| Assets standing at a gain | The UK does not generally rebase assets to their value on arrival | Consider selling and rebuying before you become resident |
| 401(k) and IRA | Growth protected under the treaty pension article | Keep them; check the provider serves overseas clients |
| Roth IRA | Treated under the treaty; new contributions after the move are less settled | Consider funding for the current year before you go |
| State residency | Some states keep taxing former residents who leave ties behind | Close driving licence, voter registration and address links |
| US brokerage and bank accounts | Some close accounts for overseas addresses | Confirm in writing that accounts can stay open |
The fund point is the one that surprises people. A US index fund that is perfectly efficient on a US return can produce UK income tax on the whole gain when sold by a UK resident, because offshore funds without UK reporting status are taxed as offshore income gains rather than capital gains.
After you arrive
The mirror-image problem starts the moment you open UK accounts. UK funds, including those inside a stocks and shares ISA, are generally passive foreign investment companies for US purposes, with punitive treatment and Form 8621 — see PFIC rules for Americans. The practical result is that neither country's standard investment products work cleanly for someone taxed by both.
- Your UK bank accounts count towards the FBAR once they exceed $10,000 in aggregate at any point.
- UK pension contributions need the treaty to be deductible in the US, covered in UK pension contributions and US tax.
- If your US employer sent you, check that a certificate of coverage keeps you in the US Social Security system.
- Register for UK Self Assessment where you have income not taxed through PAYE.
- Keep a record of arrival dates; the day count drives both residence tests and the exclusion.
Your first US return as an expat
The first year abroad is a part-year for the foreign earned income exclusion, prorated by qualifying days, and you will usually be deciding for the first time between the exclusion and the foreign tax credit. That choice affects your IRA contributions and the refundable child credit as well as the tax, so model it before filing.
You also gain the automatic extension to 15 June for Americans abroad, and the calendar of dates is in US expat tax deadlines for 2026. Your UK return runs to 31 January after the end of the UK tax year.
Plan the whole exit, not just the arrival
How long you stay matters. After ten years of UK residence out of twenty, you become a long-term resident for inheritance tax, and your worldwide estate falls within UK inheritance tax — covered in long-term residence and inheritance tax. Knowing your likely horizon on arrival shapes decisions about property, trusts and where assets are held.
Tranzesta prepares a pre-move plan covering both systems, then files the first UK and US returns from the same figures. Book a consultation before you give notice on your US address. The wider picture sits under cross-border taxation.
Frequently Asked Questions
When do I become UK resident for tax after moving from the US?
When you meet the statutory residence test — automatically if you spend 183 days or more in the UK in a tax year, if your only home is in the UK for 91 consecutive days and you are there on at least 30 days, or if you work full-time in the UK. Split-year treatment usually means UK tax on foreign income starts from arrival.
Do I still file US taxes after moving to the UK?
Yes. US citizens are taxed on worldwide income wherever they live, so you file a US return every year you meet the filing threshold. The foreign earned income exclusion or the foreign tax credit usually removes most or all of the US tax on UK salary, but the return and the FBAR are still required.
Should I sell US investments before moving to the UK?
It is worth reviewing them. The UK does not generally rebase assets to their value when you arrive, so gains built up before the move can be taxed in the UK when you later sell. US funds without UK reporting status are also taxed as income rather than gains, which often makes selling before residence starts the better option.
Can I keep my 401(k) and IRA when I move to the UK?
Yes. The US–UK treaty's pension article generally protects growth inside US retirement accounts from UK tax until you take distributions. The practical risk is administrative: some US providers restrict accounts for customers with overseas addresses, so confirm the position before you move.
Can a US citizen use the UK four-year FIG regime?
Yes, if they were non-UK resident for at least ten consecutive tax years before arriving. The regime removes UK tax on foreign income and gains for up to four years, but the US continues to tax the same income, and a claim costs the UK personal allowance and capital gains annual exempt amount.
Is moving from Dubai to the UK different?
The UK rules are identical — the statutory residence test, split-year treatment and the four-year regime if you qualify. The US side changes more: if you relied on the foreign earned income exclusion in the UAE, the UK's higher taxes usually make the foreign tax credit the better relief from the year you arrive.
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