Moving to the UK from the US: The Tax Planning Window Before You Land

Why the window before arrival matters

The day you become UK tax resident, your worldwide income and gains come into HMRC's view — and every US asset you own gets a second tax system attached to it. Some assets pass through unscathed. Others, perfectly sensible while you lived stateside, become quietly toxic: US mutual funds without HMRC reporting status, certain state-favoured wrappers, unexercised options with awkward timing. Before residence begins, restructuring costs only US tax, which you were paying anyway. Afterwards, every fix has a price in two systems.

The FIG regime: four sheltered years

From 6 April 2025 the UK replaced the old remittance basis with the foreign income and gains (FIG) regime. A new arrival who was non-UK resident for at least the 10 consecutive prior tax years can claim relief from UK tax on qualifying foreign income and gains — dividends, interest, most investment gains arising abroad — for up to their first 4 tax years of UK residence. Unlike the old remittance basis, the relief does not depend on keeping the money offshore; relieved amounts can be brought to the UK.

The claim is made in the Self Assessment return, can be targeted at particular income sources, and has a price: for a claim year you give up the UK personal allowance and the capital gains annual exempt amount. For an American, the regime pairs naturally with continuing US taxation — the US taxes the investment income anyway, and FIG relief prevents the UK layering on top during the window. Whether to claim in any given year is arithmetic, not doctrine: full details in our residence and FIG guide.

The window is also a deadline. Assets you intend to reorganise — funds to switch, gains to realise, Roth conversions to consider — are usually best dealt with before arrival or during the FIG years, while one of the two systems is standing down.

The pre-arrival review of US assets

The recurring items on a US-to-UK checklist:

• Brokerage holdings. US-domiciled mutual funds and ETFs without HMRC reporting fund status are taxed by the UK as income on disposal rather than as capital gains once you are resident and unsheltered. Reviewing holdings against HMRC's reporting funds list — and considering switches while only US tax applies — is the single most common pre-move action. See ISAs and investments.
• Unrealised gains. Gains realised before UK residence (or relieved under FIG) stay out of UK tax. Gains carried into year five do not.
• Retirement accounts. 401(k)s and IRAs generally keep tax deferral under the treaty; the questions are about contributions, conversions and eventual withdrawals. Roth conversion timing relative to the move deserves its own analysis — see US–UK pensions.
• Accounts that may close. Some US brokers restrict or close accounts for UK-resident customers; better to learn which before you depend on them.

Leaving your state properly

Federal tax follows you; state tax tries to. States vary enormously in how readily they release a departing resident, and the sticky ones look at homes retained, family location, licences, registrations and return visits. Establishing non-residence deliberately — and documenting it — prevents a fourth tax return shadowing your move for years. Our state taxes guide covers the mechanics.

The first year: split year and two returns

Your arrival year is mechanically the busiest. On the UK side, the SRT's split-year rules can divide the tax year so UK taxation of worldwide income starts at arrival rather than the previous 6 April — eligibility depends on your case, and registration for Self Assessment follows (by 5 October after the tax year). On the US side nothing pauses: citizens and green card holders file as normal, now with UK income, UK tax credits and the year-mismatch to reconcile. Expect the first cycle — one part-year UK return, one full US return, credits mapped between misaligned years — to set the template every later year follows.

Framing the pre-move review

The useful question is not "what does moving cost?" but "which decisions are cheap now and expensive later?" Selling a fund, breaking a state, timing an option exercise, choosing what to do before 6 April versus after — each is a small decision with a long tail. A single review, taken before residence begins, is how the four-year window becomes an advantage rather than a countdown.