This guide is for people planning a move across the Atlantic in either direction: Americans relocating to Britain, Britons taking a US job or green card, and families returning home after years abroad. In brief, each country has its own test for when you become and stop being resident, and the tax year of the move can be split in the UK but only partly in the US. Most of the value in planning comes before you go: what you sell, what you convert, what you keep, and when income falls.
When do I become, or stop being, UK tax resident?
Your UK residence for each tax year (6 April to 5 April) is decided by the statutory residence test. You work through three stages in order: the automatic overseas tests, the automatic UK tests, and then the “sufficient ties” test, which weighs your days in the UK against your connections here.[1]
You are automatically non-resident if you meet any automatic overseas test: fewer than 16 days in the UK where you were resident in one or more of the previous three years; fewer than 46 days where you were not; or full-time work abroad with fewer than 91 days in the UK and fewer than 31 UK working days. If none applies, you are automatically resident if you spend 183 days or more in the UK, if your only home is in the UK for a qualifying period, or if you work full-time in the UK over a 365-day period.[1]
If neither set of automatic tests settles it, the sufficient ties test applies. The ties are a UK-resident family member, available UK accommodation, substantive UK work, more than 90 days in the UK in either of the previous two years and, for leavers only, spending more days in the UK than in any other country. The fewer days you spend, the more ties it takes to make you resident.[1]
| Days in the UK in the tax year | Arrivers (not resident in any of the previous 3 years) | Leavers (resident in 1 or more of the previous 3 years) |
|---|---|---|
| Fewer than 16 | Not resident | Not resident |
| 16 to 45 | Not resident | 4 ties |
| 46 to 90 | All 4 ties | 3 ties |
| 91 to 120 | 3 ties | 2 ties |
| 121 to 182 | 2 ties | 1 tie |
| 183 or more | Resident | Resident |
The asymmetry matters. Someone leaving the UK for the US with a spouse still living in the family home in Surrey can be caught by just one or two ties, so leavers often need to cut ties as well as days. Keep a day-by-day record; HMRC can ask for it.
Can the UK tax year be split in the year I move?
Yes, if you meet one of eight “split year” cases. You are then taxed as UK resident for part of the year and as non-resident for the rest, rather than being UK resident for the whole year.[1]
Cases 1 to 3 cover leaving the UK and cases 4 to 8 cover arriving or returning. Each has detailed conditions, and all of them must be met.[1][26]
| Case | Direction | Situation |
|---|---|---|
| 1 | Leaving | Starting full-time work overseas |
| 2 | Leaving | Partner of someone starting full-time work overseas |
| 3 | Leaving | Ceasing to have a home in the UK |
| 4 | Arriving | Starting to have your only home in the UK |
| 5 | Arriving | Starting full-time work in the UK |
| 6 | Arriving | Ceasing full-time work overseas |
| 7 | Arriving | Partner of someone ceasing full-time work overseas |
| 8 | Arriving | Starting to have a home in the UK |
Split-year treatment does not apply to everything. Gains on assets held before you left can be taxed on your return if you are non-resident for five years or less under the temporary non-residence rules; you need to be away for more than five years to be outside them.[1]
When do I become a US tax resident?
A US citizen is always a US taxpayer. A non-citizen becomes a US tax resident by holding a green card at any time in the calendar year, or by meeting the substantial presence test.[13]
The substantial presence test is met if you are in the US for at least 31 days in the current year and 183 days over three years, counting all days this year, one-third of last year’s days and one-sixth of the days in the year before. Some people, such as students and teachers on certain visas, are “exempt individuals” whose days do not count, and a “closer connection” exception can apply to someone with stronger ties to another country.[12]
In the year you arrive, you are usually a dual-status taxpayer: non-resident until your residency starting date and resident afterwards. For a green card holder that is generally the first day in the US as a lawful permanent resident; under the substantial presence test it is generally the first day of presence, ignoring up to 10 days of earlier visits.[13] A dual-status return has real limits: no standard deduction, and no joint return unless an election is made.[13][14] A married couple can elect to treat a non-resident spouse as resident for the whole year and file jointly, which brings the 2026 joint standard deduction of $32,200 and joint brackets, but also brings that spouse’s worldwide income into US tax.[13][16]
A green card holder who is also UK resident can use the US–UK treaty’s tie-breaker to be taxed as a non-resident. The IRS warns that doing so can count as ending long-term US residence and may bring the US exit tax into play.[13] This is not a choice to make without advice.
What should I consider before moving from the UK to the US?
The main questions are which gains to realise before you go, what to do with ISAs and UK funds, how your UK pensions will be taxed, and how UK inheritance tax will follow you. Once you are a US resident, the US taxes your worldwide income and gains, and it does not reset the cost of assets you bring with you.
Capital gains. The US measures a gain from what you paid, not from the value when you arrived: “the basis of property you buy is usually its cost”.[15] Gains built up while you lived in the UK can therefore be taxed in the US when you sell after the move. Realising some gains while still UK resident, using the £3,000 annual exempt amount and UK rates of 18% or 24%, resets the cost for later US purposes.[5] Whether that is worthwhile depends on the size of the gains, your UK rate and your expected US rate.
ISAs and UK funds. You can keep an ISA after leaving and it stays tax-free in the UK, but you cannot add to it while non-resident, and you must tell the provider.[6] The US does not recognise ISAs, so once you are a US resident the income and gains inside are taxable in the US, and UK-domiciled funds held there can be passive foreign investment companies (PFICs) with punitive US treatment. See ISAs, UK funds and PFIC rules for Americans.
Pensions. Under the US–UK income tax treaty, income and gains inside a UK pension scheme are generally not taxed until paid out, and pensions are then generally taxed in the country where you live.[20] The treaty also has specific rules for lump sums and for contributions made after you move, which are fact-sensitive. See UK pensions for US persons.
Inheritance tax. If you have been UK resident for at least 10 of the previous 20 tax years, UK inheritance tax continues to apply to your worldwide estate for between three and ten years after you leave.[11] See UK inheritance tax and US estate tax.
National Insurance. If you want to keep building UK State Pension entitlement while in the US, from 6 April 2026 only Class 3 contributions are available for time abroad, and only if you lived in the UK for 10 years in a row or have 10 years of contributions.[8]
What should I consider before moving from the US to the UK?
For a non-US citizen, the new FIG regime can make the first four years of UK residence very favourable. For a US citizen, the key questions are Roth conversions, gains on US investments, and which US funds will work in the UK.
The 4-year FIG regime. From 6 April 2025, a person who becomes UK resident after at least 10 consecutive tax years of non-residence can claim relief from UK tax on qualifying foreign income and gains arising in their first four years of UK residence.[2][3] The claim is made on the Self Assessment return for each year, and it has a cost: in a year in which you claim, you lose the income tax personal allowance (£12,570) and the capital gains tax annual exempt amount.[25][4] Overseas workday relief, for employment duties performed abroad, is available for three years and limited to the lower of 30% of the qualifying employment income or £300,000 a year.[2] Returning Britons who have been away for ten years or more can also qualify.
For US citizens the regime is less generous than it looks. Foreign income relieved from UK tax is still taxed by the US, and without UK tax there is no UK credit to offset it. The regime can still help, for example where US tax on US dividends is lower than UK tax would be, but it needs to be modelled rather than assumed.
Roth conversions. Many Americans consider converting a traditional IRA to a Roth IRA before they become UK resident, in a year when only US tax applies. The UK treatment of a conversion made while UK resident is less certain, so the timing is worth deciding before the move. See US retirement accounts when you live in the UK.
Gains on US investments. The UK, like the US, generally taxes a gain from original cost, so growth before arrival can be taxed in the UK after you arrive, at up to 24%, unless it is relieved under the FIG regime.[5] A US citizen realising gains while still US resident pays only US tax (plus any state tax), which for many is 0% or 15% on long-term gains (in 2026 the 15% band for joint filers runs to $613,700).[17] US-domiciled ETFs and mutual funds usually lack UK reporting-fund status, so gains on them can be taxed as income in the UK; see investing across US and UK markets.
Healthcare and visas. Most visa applicants pay the immigration health surcharge, currently £1,035 a year for adults (£776 for students and under-18s), for access to the NHS.[7]
Do US states tax me when I arrive or leave?
Often, yes. US states set their own residence rules, and a state may continue to treat you as resident after you move abroad if you keep a home or other ties there. States are not necessarily bound by the US–UK treaty.
California is a prominent example: its instructions require income excluded under a US tax treaty to be added back unless it is specifically exempt for state purposes, and it does not allow a deduction for foreign income taxes.[21] An American moving to London from California, or a Briton moving to California, can therefore face state tax that federal foreign tax credits do not relieve. Which state you move to, and how cleanly you leave one, can matter as much as the federal position.
Is there an exit tax when I leave?
The UK has no general exit tax for individuals, although the temporary non-residence rules can tax gains when you return within five years. The US can impose an exit tax on citizens who renounce and on long-term green card holders who give up US residence.
A long-term resident is someone who held a green card in at least 8 of the 15 tax years before leaving. A citizen or long-term resident is a “covered expatriate” if any of three tests is met: average annual net income tax over the previous five years above a threshold ($211,000 for 2026), net worth of $2 million or more, or failure to certify five years of US tax compliance on Form 8854.[18][17]
A covered expatriate is treated as selling all their property at market value on the day before expatriation, with the first $910,000 of gain excluded in 2026.[17][18] IRAs and similar tax-deferred accounts are treated as fully distributed on that day, without the early-withdrawal penalty, and deferred compensation has its own rules.[19] There are limited exceptions, including for some people who were dual citizens from birth.[19]
A Briton on a green card for seven years who returns to the UK is not a long-term resident; the same person in their eighth year may be. Timing a return around the 8-of-15 count can matter, and using the treaty tie-breaker while holding a green card can itself be treated as ending long-term residence.[13]
What happens to healthcare, Social Security and the State Pension?
The US–UK totalisation agreement stops you paying social security contributions to both countries for the same work and lets you combine contribution records to qualify for retirement, survivors and disability benefits. Its rules on dual contributions extend to the Medicare hospital insurance tax, but combining records applies only to those cash benefits, not to Medicare.[22][27]
To use UK credits towards US Social Security, you need at least six US credits; for the UK, at least one year of UK coverage.[22] Under Article 17(3) of the treaty, social security paid by one country to a resident of the other is taxable only in the country where the recipient lives: US Social Security paid to a UK resident is taxed only in the UK, and the UK State Pension paid to a US resident only in the US.[20][24] The UK State Pension continues to be increased each year for pensioners living in the USA, unlike in some other countries.[10] For someone returning to the US near 65, Medicare enrolment timing matters: the Part B late enrolment penalty adds 10% to the premium for each full year you could have enrolled but did not, usually for as long as you have Part B.[23] See Social Security and the UK State Pension.
Worked example: a US citizen’s tax once settled in the UK (computed in Edale’s planner)
Fictional household, for illustration only. Alex (50, US citizen) and Sam (48) are UK resident for a full year, as a household would be once the year of the move is behind it, and make no claim under the FIG regime. Alex earns about £94,000 and Sam about £38,000. They hold a $200,000 US brokerage account plus a UK ISA, SIPPs and a general investment account. UK and US tax are computed for 2026 on the planner’s stated rules, with US foreign tax credits applied; US figures are shown as sterling equivalents. Results are not guaranteed, and tax rules and individual circumstances vary.
| Item | Amount |
|---|---|
| UK income tax | £28,988 |
| National Insurance | £5,949 |
| US federal tax before credits (sterling equivalent) | £15,246 |
| Foreign tax credit used | £15,246 |
| US top-up tax payable | £0 |
| Total tax as a US-citizen household | £34,937 |
| Total tax if not a US person | £34,937 |
For employment income taxed in the UK at UK rates, the UK tax is higher than the US tax on the same income, so the foreign tax credit wipes out the US liability. The household pays the same total as a non-US family would: about £34,940.
That is the reassuring part. The filing obligations remain: a US return with foreign tax credit forms, and reports of UK accounts. And the picture changes in years when UK tax is low relative to US tax – for example, investment income inside an ISA, UK funds treated as PFICs, the 3.8% US net investment income tax, some pension lump sums that are tax-free in the UK, or a gain that is larger in dollars than in pounds because the exchange rate moved.
The timing of the move can shift those years. As a simple illustration of our own, not a planner output: suppose Alex has a £60,000 gain on US shares before the move. Realised while US resident and in the 15% US band, the US tax is about £9,000 and there is no UK tax. Realised in the first UK year as a higher-rate taxpayer, ignoring the FIG regime, the UK charge would be about (£60,000 − £3,000) × 24% = £13,680. The US still taxes the gain, but under the treaty’s rules for US citizens resident in the UK it would broadly give a foreign tax credit for the UK tax, leaving the household paying roughly the higher of the two. Exchange rates, state tax and the net investment income tax could change this.
How the Edale Wealth Hub helps
A move is a change to every assumption in a financial plan at once: tax rules, currency of spending, pension access, healthcare costs and where heirs will live. Edale’s planner lets an adviser and client test it before it happens.
The guided “move country” what-if models a move to the United States, a move to the UK, a move to another country, and a move within the UK to or from Scotland, where income tax rates differ. The result can be saved as a scenario and compared side by side with staying put, so the client sees the effect on tax, spending and what is left.
Because the planner models a household across the US and UK at once, in any mix of currencies, the comparison includes UK income tax, National Insurance and capital gains tax, US federal income tax, payroll taxes and the net investment income tax, and the interaction of the two for US persons through foreign tax credits and treaty treatment. It covers the accounts that move with you – 401(k)s, IRAs and Roth IRAs, SIPPs and workplace pensions, ISAs and brokerage accounts – and can model Roth conversions year by year, which helps when choosing whether to convert before or after a move. Historical GBP/USD currency episodes can be moved along the timeline, for example to the year of a move, to show how an exchange-rate shift would affect a household whose spending changes currency.
UK inheritance tax is calculated to the second death; US estate tax and US state taxes are not modelled, so state residence questions and US estate planning need US specialists. The Wealth Hub’s tax outputs are planning summaries to share with your accountant or tax preparer, not tax returns. Whether and when to move is your decision; the planner’s role is to show the financial consequences clearly.
Read more about the cashflow planner, the complete guide to US–UK wealth planning, or arrange a conversation.
Frequently asked questions
How many days can I spend in the UK after moving to the US?
It depends on your ties. If you were UK resident in any of the previous three years, fewer than 16 days is automatically non-resident. Between 16 and 182 days, the number of UK ties you keep decides it: with 121 to 182 days, a single tie such as available UK accommodation or a UK-resident spouse can make you resident. Keep a careful day count.
Can I keep my ISA if I move to the US?
Yes. You can keep an ISA and it stays free of UK tax, but you cannot pay in while you are non-resident, and you must tell the provider. The US does not recognise ISAs, so as a US resident you are taxed in the US on income and gains inside it, and UK funds inside it may be treated as PFICs.
Does a US citizen moving to the UK qualify for the 4-year FIG regime?
Citizenship does not matter for the UK test: anyone becoming UK resident after at least 10 consecutive tax years of non-residence can claim. But the US still taxes a citizen’s worldwide income, and claiming loses the UK personal allowance and capital gains exemption for that year, so the benefit for Americans is often limited and needs to be modelled.
When does my US tax residence start if I get a green card?
Generally on the first day you are in the US as a lawful permanent resident. Before that date in the same calendar year you are non-resident, so the year is a dual-status year unless an election is made. A dual-status return cannot use the standard deduction or be filed jointly without an election.
Will I pay US exit tax if I give up my green card?
Only if you are a long-term resident, meaning a green card holder in at least 8 of the last 15 tax years, and a covered expatriate. That applies if your average net income tax exceeds $211,000 (2026), your net worth is $2 million or more, or you cannot certify five years of compliance. Covered expatriates are taxed as if they sold everything.
Can I still pay voluntary National Insurance from the US?
From 6 April 2026, voluntary Class 2 contributions are no longer available for time abroad. You can pay Class 3, at £18.40 a week in 2026/27, if you previously lived in the UK for 10 years in a row or have paid 10 years of contributions. Apply using form CF83.
Is my UK State Pension frozen if I retire to the US?
No. The US is one of the countries where the UK State Pension is increased each year. Under the US–UK treaty, social security is taxed only where the recipient lives, so a UK State Pension paid to a US resident is taxable only in the US, and US Social Security paid to a UK resident only in the UK.
Sources
- HMRC — RDR3: Statutory Residence Test guidance note (accessed September 2026)
- HMRC — SA109 notes 2026: Residence and foreign income and gains (FIG) regime (accessed September 2026)
- GOV.UK — Changes to the taxation of non-UK domiciled individuals (accessed September 2026)
- GOV.UK — Income Tax rates and Personal Allowances (accessed September 2026)
- GOV.UK — Capital Gains Tax rates and allowances (accessed September 2026)
- GOV.UK — Individual Savings Accounts: if you move abroad (accessed September 2026)
- GOV.UK — Pay for UK healthcare as part of your immigration application: how much you have to pay (accessed September 2026)
- GOV.UK — Voluntary National Insurance: if you live or work abroad (accessed September 2026)
- GOV.UK — Voluntary National Insurance: rates (accessed September 2026)
- GOV.UK — Countries where we pay an annual increase in the State Pension (accessed September 2026)
- legislation.gov.uk — Inheritance Tax Act 1984, section 6A (long-term UK resident) (accessed September 2026)
- IRS — Substantial presence test (accessed September 2026)
- IRS — Publication 519, U.S. Tax Guide for Aliens (accessed September 2026)
- IRS — Dual-status aliens (accessed September 2026)
- IRS — Publication 551, Basis of Assets (accessed September 2026)
- IRS — IRS releases tax inflation adjustments for tax year 2026 (accessed September 2026)
- IRS — Revenue Procedure 2025-32 (accessed September 2026)
- IRS — Expatriation tax (accessed September 2026)
- Legal Information Institute — 26 U.S. Code § 877A, Tax responsibilities of expatriation (accessed September 2026)
- HMRC — 2001 UK–USA Double Taxation Convention, as amended by the 2002 protocol (accessed September 2026)
- California Franchise Tax Board — 2025 Instructions for Schedule CA (540) (accessed September 2026)
- Social Security Administration — U.S.–U.K. totalization agreement (accessed September 2026)
- Medicare.gov — Avoid late enrollment penalties (accessed September 2026)
- IRS — Publication 915, Social Security and Equivalent Railroad Retirement Benefits (accessed September 2026)
- GOV.UK — Check if you can claim the 4-year foreign income and gains regime (accessed September 2026)
- HMRC — Residence and FIG Regime Manual RFIG21000, Statutory Residence Test: split year treatment (accessed September 2026)
- Social Security Administration — U.S. international social security agreements (accessed September 2026)