US Expat Taxes UK: A Beginner's Guide for Americans Who Have Just Moved
A first-year guide for Americans who have just moved to Britain: why you still file in the US, the first US and UK deadlines, how to avoid paying tax twice, the forms that report UK accounts, and what to do if you are already behind.
Your first months in Britain are the time to set up records for both countries, because the US return still follows you here.
Written by the US UK Tax Experts team, cross-border tax specialists
US expat taxes UK: an introduction
The US expat taxes UK residents face begin with one fact: the United States taxes its citizens wherever they live. So when you move to Britain, you keep filing a US return every year, and you may file a UK return too. However, credits and exclusions usually stop the same income being taxed twice.
This guide covers your first year or two in the UK. For the full picture of how the two returns fit together, read our guide to US and UK tax returns. Our US federal returns service explains how we prepare the US side.
Why US expat taxes UK arrivals face start with citizenship
Most countries tax people because they live there. The US is different, because it taxes by citizenship as well as residence. Therefore, moving abroad does not end your US filing duty. Green card holders are in the same position while they keep their card. Meanwhile, the UK taxes you because you now live in the UK. As a result, two systems apply to you at once, and the job is to make them agree.
Do Americans living in the UK still file US tax returns?
Yes. If your worldwide income reaches the filing threshold for your status, you file a US return, even if no US tax is due.
Who must file
The IRS page on filing requirements for citizens abroad sets the rule. You file if your gross income from worldwide sources is at least the amount for your filing status. The amounts depend on your status and age, and they change each year. The current table is in chapter 1 of IRS Publication 54, the tax guide for citizens abroad. In practice, most people with a UK salary are over the threshold. That is the first rule of the US expat taxes UK residents must learn.
Your UK income counts
Worldwide income is all your income, from every country. For example, your UK salary, UK bank interest, UK dividends and gains on UK property all go on the US return. Furthermore, the figures go on in US dollars, converted at an accepted exchange rate. Consequently, US expat taxes UK filers deal with mean keeping UK records with the US return in mind.
The treaty does not switch off US tax
The US-UK tax treaty is an agreement that decides which country may tax certain income. It is listed on the IRS page of United States income tax treaties. However, it contains a saving clause, which lets the US tax its citizens as if the treaty did not exist, with some exceptions. Therefore, the treaty helps with specific items, such as pensions, but it does not remove your duty to file.
What are the first deadlines after you move?
Your US return is due on 15 April, with an automatic extension to 15 June while you live abroad. Your UK return, if you need one, is due online by 31 January after the UK tax year ends.
US deadlines for Americans abroad
The IRS page on the automatic 2-month extension explains the June date. You qualify if you live outside the US on the regular due date, and you attach a statement saying so. However, interest runs on any tax paid after 15 April. Publication 54 adds that you can ask for a further four months, to 15 October, using Form 4868. It also describes a discretionary extra two months, to 15 December, requested by letter.
UK deadlines
The UK tax year runs from 6 April to 5 April. According to GOV.UK on Self Assessment deadlines, you register by 5 October after the year ends. For the 2025 to 2026 tax year, the online return and payment are due by 31 January 2027. Paper returns are due by 31 October 2026. Notably, the two countries use different tax years, so one UK year spans two US years.
The year you arrive
Your arrival year is often the hardest to prepare. On the UK side, the statutory residence test decides whether you are UK resident for that tax year. GOV.UK explains it on its page about residence and foreign income. For example, spending 183 or more days in the UK in a tax year makes you resident. On the US side, nothing changes, because you file as a citizen throughout. Therefore, the first US return usually mixes US and UK income in one calendar year. Getting this year right sets the pattern for the US expat taxes UK newcomers file afterwards.
How do you avoid paying tax twice?
You use the foreign tax credit, the foreign earned income exclusion, or both. Because UK rates are often higher than US rates, many UK residents owe little or no US tax on their salary.
The foreign tax credit
The foreign tax credit is a US credit for income tax you paid to another country. You claim it on Form 1116. For example, UK income tax deducted from your salary through PAYE can offset the US tax on that salary. Additionally, unused credit can often be carried forward to later years. However, the credit works in separate categories, so tax on salary cannot always cover tax on investment income.
The foreign earned income exclusion
The foreign earned income exclusion lets you leave some foreign earnings out of US taxable income. The IRS page on figuring the exclusion sets the cap at $130,000 for 2025 and $132,900 for 2026. You must pass either the bona fide residence test or the physical presence test. Moreover, the exclusion covers earned income only, not interest, dividends or gains.
Which one suits UK residents
For the 2026 to 2027 tax year, GOV.UK on Income Tax rates lists a £12,570 Personal Allowance. Above that, rates are 20%, 40% and 45%. Because those rates are often higher than US rates, the credit frequently does better than the exclusion. In our experience, the credit also keeps more options open for later years. Even so, the right answer depends on your income, so we model both ways before filing. For most US expat taxes UK employees face, the credit ends up doing the heavy lifting.
What US forms report UK accounts and assets?
Most Americans in the UK file an FBAR, and some also file Form 8938. UK investments can bring extra forms as well.
The FBAR
The FBAR is the annual report of foreign financial accounts filed with FinCEN, the US financial crimes agency. According to the IRS FBAR page, you file if your foreign accounts together exceed $10,000 at any time in the year. It is due on 15 April, with an automatic extension to 15 October. You file it online through the BSA E-Filing System, as FinCEN explains on its FBAR page, separately from your tax return. In our experience, it is the form newcomers most often miss among the US expat taxes UK residents handle.
Form 8938
Form 8938 is a statement of specified foreign financial assets filed with your tax return. The IRS page on whether you need Form 8938 sets higher thresholds for people living abroad. For a single filer, that is more than $200,000 at year end or $300,000 at any time. For a joint return, the figures are $400,000 and $600,000.
ISAs and UK funds
An ISA is a UK savings account that is tax-free in the UK. However, US law has no matching relief, so the income inside it is taxable on your US return. UK funds raise a further issue. Most UK unit trusts and OEICs count as passive foreign investment companies for US purposes. Our article on PFIC rules for UK funds explains the extra form and tax they can bring. Your savings choices therefore shape the US expat taxes UK savers pay each year.
Do you need a UK tax return as well?
Not always. Many employees pay all their UK tax through PAYE and never file, but foreign income, self-employment and gains can change that.
When PAYE is enough
PAYE is the system that takes UK tax from your salary before you are paid. GOV.UK on who must send a tax return lists the main triggers. These include self-employment income over £1,000, Capital Gains Tax to pay and untaxed income. Notably, untaxed income includes foreign income, such as US interest or rent from a US home. Our UK Self Assessment service covers returns for Americans who need one.
The new UK rules for foreign income
The UK changed how it taxes foreign income for new residents from 6 April 2025. GOV.UK explains the 4-year foreign income and gains regime. It gives relief on foreign income and gains in your first four years of UK residence. To qualify, you need at least ten consecutive years of non-UK residence before you arrive. However, you claim it on a UK return, and the US still taxes the same income.
Social security on both sides
A totalization agreement is a treaty that stops you paying social security tax to two countries on the same work. The US and UK have one. The IRS page on totalization agreements explains that a certificate of coverage proves which system you belong to. Therefore, if your US employer sends you to London, ask about a certificate before you start.
What if you are already behind on US filing?
If you missed US returns or FBARs without meaning to, the IRS Streamlined Foreign Offshore Procedures usually let you catch up without penalties.
The Streamlined route
The IRS page for US taxpayers residing outside the United States sets the terms. You file three years of returns and six years of FBARs, and certify your conduct was non-wilful. You must have been outside the US for at least 330 full days in one of the three years, with no US abode. Our guide to the Streamlined Foreign Offshore Procedures walks through each step.
Late FBARs on their own
Filing late FBARs alone is not a safe shortcut. The IRS removed its Delinquent FBAR Submission Procedures page in July 2026. Therefore, late FBARs filed outside a programme are not a penalty-free route. For most US expat taxes UK catch-ups, Streamlined is the cleaner path.
A worked example of US expat taxes UK newcomers face
Consider a typical case. Emily is 31, a US citizen who moved from Chicago to Manchester in August 2025 for a new job. She has a UK salary, a UK current account, a cash ISA opened in early 2026 and a small US brokerage account. This is an illustrative example, not a real client.
First, Emily files a 2025 US return covering her US salary to July and her UK salary from August. Next, she claims the foreign tax credit for UK PAYE tax on her UK pay. Then she files an FBAR, because her UK accounts passed $10,000 during 2025. Her assets stay well under the Form 8938 thresholds for people abroad. On the UK side, she is resident under the 183-day test for 2025 to 2026. Because her US brokerage pays dividends, she has untaxed foreign income. Consequently, she registers for Self Assessment by 5 October 2026.
What Emily learns from year one
Emily's ISA interest becomes taxable on her 2026 US return, so she tracks it each year. She also keeps her payslips and her P60, the UK end-of-year pay certificate, for both returns. As a result, her second year takes far less time than her first.
How US UK Tax Experts can help
US UK Tax Experts prepares US and UK returns from one file, so your figures agree on both sides. For newcomers, we prepare the arrival-year US return, the FBAR and any Form 8938. We also check whether you need a UK return, and prepare it if you do. Furthermore, we model the credit and the exclusion so the US tax is as low as the rules allow. If you are new to all this, US expat taxes UK arrivals face become routine after the first year.
Conclusion
Moving to Britain does not end your US filing. Handled early, the US expat taxes UK residents face are manageable. You file a US return each year, usually an FBAR, and sometimes Form 8938. Meanwhile, the UK may need its own return. Fortunately, credits and the exclusion mean most UK residents pay little or no US tax on their salary. The key is getting the first year right, then keeping the same method every year after.
Contact us
If you have just moved and want your first returns done properly, email hello@usuktaxexperts.com or use our contact form. Tell us when you arrived and what income and accounts you have. We reply within one working day.
Frequently asked questions
Yes. US citizens and green card holders file a US return each year if their worldwide income reaches the filing threshold for their status. Living in the UK does not change that, although credits often reduce the US tax to nil.
The regular due date is 15 April, but Americans living abroad get an automatic extension to 15 June. You can ask for more time to 15 October on Form 4868. Interest runs on any tax paid after 15 April.
Usually not. The foreign tax credit lets UK tax offset US tax on the same income, and the foreign earned income exclusion can remove some earnings from US tax. Because UK rates are often higher, many UK residents owe little or no US tax on their salary.
You file an FBAR if your foreign accounts together exceed $10,000 at any time in the year. It is filed online with FinCEN, separately from your tax return. It is due on 15 April with an automatic extension to 15 October.
No. An ISA is tax-free in the UK, but US law has no matching relief, so interest, dividends and gains inside it go on your US return. Funds held in a stocks and shares ISA may also bring PFIC reporting.
Only if you meet a UK trigger, such as self-employment income over £1,000, Capital Gains Tax to pay, or untaxed income including foreign income. Many employees pay all their UK tax through PAYE. US expat taxes UK residents face often include a UK return once they have US investment income.
The IRS Streamlined Foreign Offshore Procedures let non-wilful filers catch up with three years of returns and six years of FBARs, usually without penalties. Late FBARs filed on their own are not a penalty-free route since the IRS removed its delinquent FBAR page in July 2026.
