US–UK Cross-Border Tax for Individuals: The Complete Guide
A plain-English guide to US–UK personal tax: the four-year FIG regime, FBAR and FATCA, dual filing and treaty relief, estate and inheritance tax, and exit tax.
Do the two systems collide for you?
If you recognise yourself in one of these, you likely have obligations on both sides of the Atlantic.
A US citizen living in Britain. You pay HMRC, but the US still expects a return every year because it taxes on citizenship, not residence.
New arrivals may claim the four-year FIG relief on foreign income and gains — but the window is short and the planning happens before you move.
Meet the US residence tests or hold a green card and the US taxes your worldwide income, including UK rental, ISAs and investments back home.
Born in the US or citizenship inherited from a parent — you may have filing duties you never knew about, often discovered when a bank asks.
Dual-national marriages, children with two tax identities, trusts and property on both sides — the more you own, the more the systems collide.
Renouncing citizenship or giving up a green card brings its own exit-tax rules that reward planning and punish improvisation.
The rules that shape a cross-border return
The core concepts every US–UK individual should understand — and where a specialist earns their keep.
The four-year FIG regime
Since April 2025, qualifying new UK arrivals can claim relief from UK tax on foreign income and gains for their first four years of residence, replacing the old non-dom rules. The window starts the moment you arrive, so the planning that protects it belongs before the move.
FBAR & FATCA
Two US reporting regimes that catch people out. The FBAR is required once your foreign accounts top US$10,000 at any point in the year; FATCA (Form 8938) applies once foreign assets pass higher thresholds. They are separate filings — doing one does not satisfy the other.
Dual filing & treaty relief
The heart of cross-border work: reconciling HMRC and IRS treatment together and applying the US–UK treaty once, so the same income is taxed once, not twice. Knowing where the treaty helps and where the Foreign Tax Credit does the real work is the judgement that matters.
FEIE vs Foreign Tax Credit
Two ways to avoid double tax on earned income: the Foreign Earned Income Exclusion and the Foreign Tax Credit. In a higher-tax country like the UK, the Foreign Tax Credit usually does more work — but the right choice depends on your full picture and can affect future years.
Estate, gift & inheritance
Two death-tax systems, one estate. The US charges estate tax up to 40% above a high exemption; the UK charges inheritance tax at 40% above the £325,000 nil-rate band. Since April 2025 UK inheritance tax follows a long-term-residence test rather than domicile, and a separate treaty decides which country taxes what.
Pre-arrival & exit planning
The best planning happens before a move in either direction. UK arrivals map their FIG window; US arrivals may reset the cost base of appreciated assets before US residency begins. Those leaving the US face the exit tax on "covered expatriates" and a five-year compliance certification.
Catch-up & disclosure (Streamlined)
Behind on US filing? For many this is fixable without penalties. The IRS Streamlined Procedures let eligible taxpayers whose failure to file was non-wilful get up to date by filing the most recent three years of returns and six years of FBARs — for qualifying Americans abroad, with no penalty.
The deadlines that matter, both sides
The two tax calendars do not line up — keeping them in one view is half the battle.
Run both sides as one
Tell us your situation and we'll review it — no obligation — and tell you exactly what you need across the US and UK, with a fixed quote before any work begins.
This guide is general information about US–UK personal taxation and is not tax advice. Figures, thresholds and rules are subject to change. Speak to a qualified adviser about your specific circumstances before acting.
