Tax help for Americans living in the UK

Your situation

You live and work in the UK, but you carry a US passport — which means you answer to two tax authorities at once. Perhaps you came for a job, a partner or a degree and stayed. However ordinary your finances feel, the combination of US citizenship and UK residence puts you in a genuinely cross-border position, and the two systems were not designed to fit together neatly.

What each country expects from you

The United States taxes citizens on worldwide income wherever they live. If your income exceeds the normal filing thresholds you file Form 1040 each year, reporting your UK salary, self-employment profits, rent, interest and gains. Americans abroad get an automatic extension to 15 June, with a further extension to 15 October available. Separately, if your non-US accounts together topped $10,000 at any point in the year, you file an FBAR — and larger holdings can also trigger Form 8938.

The United Kingdom taxes you as a resident. If you have income that is not fully handled through PAYE — self-employment, rent, investment income, foreign income — you will usually need to register for Self Assessment by 5 October after the end of the tax year and file online by 31 January. The UK tax year runs 6 April to 5 April, which never lines up with the US calendar year, so every figure needs restating between the two.

New arrivals may qualify for the four-year foreign income and gains regime that replaced the remittance basis from 6 April 2025 — valuable, but only if claimed and managed deliberately.

The classic traps

The expensive mistakes are rarely about salary. They are about the places where the two systems disagree:

• ISAs. Tax-free in the UK, fully taxable in the US — and a stocks and shares ISA usually holds funds the US treats punitively as PFICs.
• UK funds and pensions. Ordinary UK investments can carry heavy US reporting; pension contributions and growth need treaty analysis, not assumptions.
• Mismatched tax years and exchange rates. Every income item has to be converted and re-timed. Done inconsistently, the same pound of income can be taxed twice or credit can be wasted.
• Selling your home. The UK may exempt the gain entirely while the US taxes part of it — including currency movement you never saw as profit.

One firm, both returns

Most problems we untangle began with two separate preparers — one in each country — each seeing half the picture. We prepare the US return and the UK Self Assessment together, from Birmingham, so credits, elections and timing decisions are made once, coherently, with fixed fees agreed before any work begins.

When to get advice

Talk to someone before you invest, buy or sell property, start a business, or draw a pension — not after. And if you have been in the UK for years without filing US returns, there is a well-trodden, penalty-managed route back. A consultation is the quickest way to find out where you actually stand.