High net worth US UK tax planning is almost entirely a question of sequencing. Nearly every relief worth having on a transatlantic move — the four-year foreign income and gains regime, pre-arrival portfolio rebasing, clean capital segregation, split-year treatment, severing a US state tax residence — is available in the months before you land and closed off the moment you arrive.
The two systems also run on different calendars. The United States taxes on a calendar year to 31 December; the United Kingdom runs to 5 April. A move in February sits inside two US years and one UK year; a move in May does the opposite. That single mismatch drives the timing of every disposal, every election and every credit claim in the first eighteen months, and it is why serious planning starts twelve months out rather than in the fortnight before the container ships.
Twelve to nine months out: fix the residence baseline
Everything downstream depends on two determinations, and both need to be made in writing before any other decision is taken.
The first is your UK residence position under the statutory residence test, set out in HMRC's RDR3 guidance note on the statutory residence test — the automatic overseas tests, the automatic UK tests, and the sufficient ties test with its day-count bands. The test is mechanical and it is unforgiving: a single extra UK day in the year of arrival can change the answer, and the answer changes the tax treatment of an entire year's income. We set out how each limb applies to an American in the statutory residence test for Americans.
The second is your prior residence history, because the four-year regime described below requires ten consecutive tax years of non-UK residence immediately before the year of arrival. A single year of UK residence eight years ago disqualifies you entirely. People misremember this — a year on secondment, a student year, a period of dual presence — and it is worth reconstructing from records rather than memory.
Do both now, because if the ten-year test fails, the entire plan changes and you want to know that before you have restructured a portfolio around a relief you cannot claim.
Nine to six months out: the FIG decision
From 6 April 2025 the remittance basis was abolished and replaced with a residence-based four-year foreign income and gains regime. A qualifying new arrival gets 100% relief from UK tax on foreign income and foreign gains for their first four years of UK residence, and can bring those funds into the UK freely — the old remittance trap is gone for that window.
For an American with a substantial US portfolio, this is the most valuable relief in the UK system. US dividends, US interest, US capital gains, US rental income and US pension distributions can all fall outside UK tax for four years. UK employment income does not — it is taxed normally from day one — and claiming the regime costs you the personal allowance and the capital gains annual exempt amount for that year.
The four years run from the first year of UK residence, whether or not you claim, and they are not extendable. Our full treatment of the mechanics, the claim procedure and the interaction with the temporary repatriation facility is in the abolition of the non-dom regime and the FIG rules.
The planning point at nine months is not whether to claim — that is an annual decision made on the return. It is to build the portfolio so that as much income as possible falls on the foreign side of the line during the window, and so that UK-source income, which never qualifies, is not created unnecessarily.
Six months out: rebase the portfolio while you still can
Before UK residence begins, you are outside the UK capital gains net on your worldwide portfolio. That is the moment to crystallise unrealised gains that would otherwise be exposed later, and to clear positions that are unmanageable once you are inside two tax systems.
There are three separate exercises. Rebasing: realise and reacquire appreciated positions so the UK base cost reflects current value rather than historic cost. Cleansing: sell the funds that become problematic on arrival. And segregation: separate capital, income and gains into distinct accounts, which remains worth doing even under FIG because the four years end and mixed funds are far harder to unpick retrospectively.
The cleansing exercise matters most for anyone holding UK or offshore collective investments already, and for anyone who will be tempted by them later. UK-domiciled funds, investment trusts and stocks and shares ISAs are passive foreign investment companies for American purposes, with the excess distribution regime and an annual Form 8621 attached — the position we set out in why UK ISAs fall into the PFIC rules.
Everything realised here is, of course, taxable in the United States in the year of sale. That is the trade: a US capital gains bill now against a UK exposure removed permanently. Model it before executing — our UK capital gains tax calculator gives the UK side, and the US side needs to be run against your credit position for the same year.
Six to three months out: entities, trusts and structures
Structures that work well in one jurisdiction frequently misfire in the other, and the fix is generally impossible once residence has changed.
An S corporation is the clearest example. It is a US domestic election with no UK equivalent; HMRC sees a company, and the shareholder's US pass-through treatment produces income taxed at company level in Britain with no matching credit. Americans moving to the UK with an S corporation almost always need to address it before arrival.
Family trusts need the same review from both ends. A US revocable living trust is transparent for US purposes and may be looked through differently in the UK. A non-US trust can be a foreign grantor or non-grantor trust for American purposes with Forms 3520 and 3520-A attached, and UK settlor-interested rules may apply on top. Trust reviews take months, not weeks, because they usually involve trustees in a third jurisdiction.
Closely held companies deserve a check-the-box review. A UK company owned by American shareholders can be a controlled foreign corporation, with tested income inclusions on profits never distributed, and a section 962 election may be worth making — the analysis is in the section 962 election for US owners abroad.
Three months out: property, and the surcharges
Buying in the UK before you become resident is a common instinct and an expensive one if the timing is wrong. Stamp duty land tax carries a non-resident surcharge, tested on presence in the twelve months before and after the transaction, and there is a separate surcharge for an additional dwelling where you retain a home elsewhere.
Two points recur. First, the non-resident surcharge can be reclaimed where you subsequently spend enough days in the UK, so an early purchase is not always a permanent cost — but it is a cash flow event at completion. Second, retaining the US home while buying in London usually triggers the additional dwelling surcharge, and the decision to sell or keep the American property is therefore a stamp duty decision as well as an investment one.
The mortgage side has its own trap. A sterling mortgage taken out by a US person creates a foreign currency debt, and repaying or refinancing it after sterling has moved can generate a taxable foreign currency gain under section 988 — real US tax on a transaction the borrower does not perceive as a disposal at all.
Three months to arrival: the employment package
If the move is employment-driven, the package needs restructuring before the contract is signed, not after the first payslot.
Equity is the largest item. Restricted stock units are sourced by reference to the workdays between grant and vest, so an award granted while you were in New York and vesting after you arrive in London is split between the two jurisdictions — and the two countries do not agree on the timing of the taxable event. The full treatment is in US and UK tax on RSUs and stock options, and the practical answer is usually to establish and document the sourcing fraction at the point of move rather than reconstructing it three years later from HR records.
Pensions come next. Contributions to a UK registered scheme are relievable in the UK, and the US–UK treaty gives limited recognition to cross-border pension contributions — but the annual allowance taper and the US treatment of employer contributions need to be modelled together. Then National Insurance: a certificate of coverage under the totalization agreement can keep you in the US social security system for a defined detachment period and out of UK National Insurance, or vice versa, but it must be applied for through the sending country and it takes time.
Finally, signing bonuses, relocation allowances and tax equalisation clauses all have their own treatment. A gross-up clause that looks generous can leave the employee carrying the residual US liability the equalisation calculation never contemplated.
The month of arrival: split-year treatment and day counting
The UK tax year runs to 5 April, and a person who becomes resident part-way through it is normally resident for the whole year — unless a split-year case applies, in which case the year is divided into a UK part and an overseas part, and foreign income and gains in the overseas part fall outside UK tax.
There are several split-year cases for arrivals, keyed to starting full-time work in the UK, ceasing full-time work overseas, or acquiring a UK home. They are not elective and they are not interchangeable: you fall into the one your facts support, or none of them.
From the day you land, day counting becomes a discipline rather than an afterthought. Keep a contemporaneous record of every day of presence, every arrival and departure, boarding passes and accommodation. HMRC's tests turn on midnight presence and the record is your evidence, and the same discipline supports the US side, where the bona fide residence and physical presence tests for the foreign earned income exclusion are also day-sensitive.
The state tax problem Americans forget
Federal treatment is only half the American picture. Several states — California, New York, New Mexico, South Carolina and Virginia among the most aggressive — continue to assert residence long after departure, and none of them is a party to the US–UK treaty. Treaty relief does not bind them.
Severing state residence is a factual exercise done before departure: end the lease or sell the property, change the driving licence and vehicle registration, close local bank accounts, move professional registrations, change the mailing address for everything, resign from local boards and clubs, and file a part-year resident return for the year of departure.
The states that apply a domicile-and-permanent-place-of-abode test will look at whether you kept somewhere available to live. A New York apartment retained for visits is a permanent place of abode, and combined with a modest number of days in the state can produce statutory residence and a full-year New York liability on worldwide income — with no UK credit for it, because the UK gives credit against US federal tax rather than state tax under the treaty. We cover the pattern in state tax for Americans abroad.
The first three months in the UK: registration and deadlines
The administrative window is short and the deadlines are real. Registration for Self Assessment must be done by 5 October following the end of the tax year in which the liability arose, and failure to notify chargeability is a separate penalty regime from late filing, geared to the tax at stake and to your behaviour.
Alongside that: apply for a National Insurance number if you do not have one, obtain the certificate of coverage if the totalization position supports it, register with HMRC for any UK property income, and open UK banking. The last of these is harder for an American than for anyone else, because FATCA reporting makes some UK institutions reluctant to onboard US persons at all — which is a reason to start it before you need it.
Note the FBAR and Form 8938 consequences from the first day. New UK current accounts, a workplace pension, an employer share plan account and a mortgage offset account all count towards the $10,000 FBAR aggregate, and the FBAR threshold is aggregate across all accounts, not per account.
The first full dual-filing year
Your first complete year in both systems is the one that sets the pattern for every year after it, and it is worth over-engineering.
The central mechanical problem is the tax year mismatch. UK tax on 2026/27 income is paid in January 2028; the US return for calendar 2026 is filed in 2027. Foreign tax credits are claimed on a paid or accrued basis, and choosing between them is an election that binds you going forward. The accrued basis usually aligns better for a UK resident, but it requires reliable estimates and a willingness to redetermine when the final UK figures land.
Then the elections: the foreign earned income exclusion or the foreign tax credit for salary — rarely both usefully, since the exclusion removes income from the credit calculation — and the basketing of passive against general limitation income. Get the first-year choices wrong and unwinding them can require IRS consent.
Build the year-one file properly: a residence memorandum with the statutory residence test working, the FIG position, the split-year case relied on, the sourcing fractions for equity, the elections made and why. Every later year is cheaper and safer if that file exists.
The clocks that start on arrival
Two long-run clocks begin the day you become UK resident, and neither is visible in the first year's tax bill.
The first is the inheritance tax clock. Since 6 April 2025 the UK charges inheritance tax on a residence basis: once you have been UK resident for ten out of the previous twenty tax years you are a long-term resident, and your worldwide estate is within the scope of UK inheritance tax at 40%. Leaving does not end it immediately — a tail of continued exposure follows departure, which we cover in the long-term resident IHT ten-year tail.
The second is the US estate tax position, which never goes away for a citizen. Estates of decedents dying in 2026 have a basic exclusion amount of $15,000,000 under the IRS inflation adjustments for tax year 2026, with the annual gift exclusion at $19,000 and the exclusion for gifts to a non-citizen spouse at $194,000. A long-term UK resident American can therefore sit inside both estate regimes at once on the same assets, reconciled only partially by the separate US–UK estate and gift tax treaty. The comparison is in US estate tax versus UK inheritance tax.
Both clocks argue for doing the estate work early, while you are still outside the ten-year window and while lifetime gifting remains straightforward.
Moving the other way: UK to US
The same timeline runs in reverse, with different pressure points. Departure from the UK raises temporary non-residence: gains realised during a period of non-residence of five years or less can be dragged back into charge on return, so a five-year plan is not the same as a permanent one.
For a green card holder or citizen returning, the American issues dominate. A UK pension or SIPP needs its treaty treatment established before drawdown begins; UK ISAs and funds should generally be liquidated before the US filing position hardens; and the transfer of a UK business interest may crystallise both UK and US charges in the same window.
For anyone considering giving up US citizenship or a long-held green card in connection with the move, the expatriation rules apply their own test — net worth, average tax liability and compliance certification — with the mark-to-market exit tax for covered expatriates. That is a decision with a two-to-three year lead time, not a three-month one, and the arithmetic is in renouncing US citizenship and the exit tax with the modelling in our US exit tax calculator.
The high net worth US UK tax planning checklist
Condensed, the plan looks like this. The dates are indicative — what matters is the order, because several steps are only possible while the earlier ones are still true.
- T-12: statutory residence test analysis and ten-year residence history reconstructed from records.
- T-9: FIG eligibility confirmed; portfolio restructured so income falls on the foreign side of the line.
- T-6: rebase appreciated positions, cleanse PFIC holdings, segregate capital from income and gains.
- T-5: entity and trust review — S corporations, family trusts, closely held companies, check-the-box positions.
- T-3: property decisions with the SDLT surcharges priced in; foreign currency mortgage exposure understood.
- T-2: employment package, equity sourcing fractions, pension and certificate of coverage application.
- T-1: state residence severed with documentary evidence; part-year state return planned.
- Arrival: split-year case identified; day-count record started; UK banking and registration under way.
- T+6 months: Self Assessment registration by 5 October; FBAR and Form 8938 inventory built.
- T+12 months: first dual-year elections made and documented; residence memorandum filed.
