The Cross-Border Tax Guide to Moving to the UK
Anyone weighing the cross-border tax moving to the UK needs two things sorted before the removal van arrives: UK residency status under the Statutory Residence Test, and confirmation that US filing duties (FBAR, FEIE, Streamlined) survive the move untouched. Get both right, and the transition is manageable.
By the TaxYork Cross-Border Tax Team — reviewed by a US-UK dual-qualified adviser (CPA / Enrolled Agent).
How does the UK Statutory Residence Test decide when you become a UK tax resident?
The Statutory Residence Test (SRT) is the mechanical rulebook HMRC uses to fix your residence status for a tax year — there is no discretion involved. For most Americans relocating, the relevant filter is the Automatic Overseas Test for arrivers: you stay a non-UK resident if you were a non-resident for the prior three tax years and spend fewer than 46 days in the UK during the year of the move. Getting this test right is the starting point for any cross-border tax move to the UK plan, since every later decision on FIG relief and split-year treatment depends on the residence answer it produces.
Sufficient ties and the day-count taper for arrivers
Once you cross that 46-day line, the sufficiency test takes over and scales with how long you stay. An arriver present under 46 days needs four UK ties to become resident, while someone present over 120 days needs only one tie — family, accommodation, work, or the 90-day tie from prior years. Anyone planning a phased move should map days against ties before booking flights, because the SRT is unforgiving of miscounted midnight crossings.
Split-year treatment when you arrive mid-tax-year
Most people relocating mid-year qualify for split-year treatment under Case 4 or Case 8, which divides the UK tax year into an overseas part and a UK part rather than taxing the whole year as a resident. This matters enormously for anyone timing a bonus, stock vesting, or asset sale around the move date — the split can determine whether that income lands in the UK's tax net at all.
What changed on 6 April 2025 that most cross-border tax guides for moving to the UK still get wrong?
The UK abolished the non-dom regime and its remittance basis entirely from 6 April 2025, replacing it with the Foreign Income and Gains (FIG) regime. Older articles still describing "claim the remittance basis and keep foreign income untaxed unless you bring it in" are describing a rulebook that no longer exists for anyone becoming a UK resident on or after that date.
The new 4-year FIG regime for qualifying new arrivals
Under the FIG regime, a qualifying new resident — someone who is not a UK resident for the ten consecutive prior tax years — can elect for full UK tax relief on foreign income and gains for their first four tax years of residence, whether or not the money is remitted to the UK. This is a genuinely different mechanic from the old remittance basis: it is time-limited to four years rather than open-ended, but it is a complete exemption rather than a deferral contingent on keeping cash offshore. Anyone researching cross-border tax moving planning should treat the FIG regime, not the old non-dom rules, as the current starting point.
Claiming FIG costs you the personal allowance and CGT exemption
Electing into FIG relief for a tax year forfeits the UK Personal Allowance (£12,570) and the CGT annual exempt amount (£3,000) for that same year, so the arithmetic only favors high foreign-income earners. The election is made annually on Self Assessment, and a split year still counts as one of the four available years — so a mid-year arrival uses up a full year of relief even though only part of it was spent as a UK resident.
How does the Temporary Repatriation Facility help with money banked offshore before the move?
The Temporary Repatriation Facility (TRF) lets former remittance-basis users bring pre-6 April 2025 foreign income and gains into the UK at a flat 12% rate for the 2025/26 and 2026/27 tax years, rising to 15% in the facility's final year, 2027/28. This is squarely relevant to anyone who spent years abroad accumulating untaxed foreign income offshore under the old rules and now wants to fund a UK home purchase or investment without full marginal-rate tax on the transfer. It is one of the few areas of cross-border tax moving to the UK planning where the correct answer changes depending on whether the person is arriving for the first time or returning after a previous UK stint.
Who actually benefits from the TRF
The facility suits US persons who lived in the UK previously under the old non-dom rules, left large offshore balances untouched, and are now returning or finally remitting funds. It does not apply to new arrivals with no prior UK non-dom history, since there is no pre-2025 untaxed pool to designate. A short consultation before making any transfer avoids accidentally triggering the ordinary arising-basis charge instead of the reduced TRF rate.
Does UK inheritance tax reach your US assets after you relocate?
UK inheritance tax on worldwide assets now depends on the Long-Term Residence (LTR) test rather than domicile, and it only bites once you have been UK-resident for 10 of the previous 20 tax years. A US citizen newly arrived in the UK is not an LTR for at least a decade, so US-situs assets — a Florida property, a US brokerage account — sit outside the UK IHT net during that entire window.
The tail period after you leave the UK
Once someone does become an LTR, a tail period of three to ten years applies after they leave the UK before LTR status drops away, with the exact length depending on how long they were resident. Anyone structuring a return to the US after several years in the UK needs this tail properly modeled, because it can keep worldwide assets within the UK IHT scope long after the removal van has gone the other way.
Rule area
Pre-6 April 2025
Current position
Foreign income/gains basis
Non-dom remittance basis (indefinite, subject to charge)
FIG regime: full relief, capped at the first 4 UK tax years
Inheritance tax trigger
Deemed domicile after 15 of 20 years
Long-Term Residence after 10 or 20 years
Offshore funds already held
Remittance charge on bringing funds onshore
TRF flat rate: 12% (2025/26–2026/27), 15% (2027/28)
Do you still have to pay US taxes once you have moved abroad?
Yes — US citizenship, not residence, is what creates the US filing obligation, and the treaty's saving clause preserves that worldwide taxation even after a UK move. Anyone handling cross-border taxes who is moving to the UK from the US side still files Form 1040 annually and reports foreign accounts regardless of where they now live.
FEIE, the Foreign Tax Credit, and the stacking rule
The Foreign Earned Income Exclusion lets you exclude $130,000 of foreign earned income for 2025 using Form 2555. However, the stacking rule under IRC §911(f) still pushes any remaining income into higher brackets as if the exclusion had not applied. Because UK income tax rates typically exceed US rates, most people newly resident in the UK do better long-term claiming the Foreign Tax Credit via Form 1116, which carries back one year and forward ten. Revoking the FEIE election locks you out of it for five years without IRS consent, so the choice deserves proper modeling before the first UK return is filed, not after.
FBAR and Form 8938 obligations don't pause for a relocation
Once combined foreign account balances exceed $10,000 at any point in the year, FBAR (FinCEN Form 114) is due, with non-wilful penalties now running up to $16,536 per form after the January 2025 inflation adjustment. Form 8938 thresholds are higher for those living abroad — $200,000 single or $400,000 married filing jointly at year-end — but both obligations start the moment new UK bank and pension accounts are opened, not after some grace period.
What happens to a 401(k), IRA, or US Social Security after settling in the UK?
US retirement accounts stay taxable under US rules regardless of where you live, and the US-UK treaty's pension article generally lets the UK also tax distributions with Foreign Tax Credit relief available to prevent double taxation. Social Security is typically taxable only in the country of residence under the treaty, meaning a UK resident usually pays UK tax on US Social Security rather than US tax. However, the mechanics depend on the specific benefit type.
National Insurance versus continued US Social Security coverage
The US-UK Totalization Agreement lets someone posted to the UK by a US employer remain on US Social Security, rather than switching to UK National Insurance, for up to five years if a Certificate of Coverage is obtained. Anyone locally hired by a UK employer, or whose assignment runs past five years, moves onto UK National Insurance instead, which affects both take-home pay and eventual UK State Pension entitlement.
Case study: a mid-year relocation with UK freelance income and a US property sale
A software consultant relocated from Texas to London in September, roughly six months into the UK tax year. She qualified for split-year treatment under Case 4, meaning only her post-arrival UK-source consulting income and the period's foreign income fell inside the UK tax net for that year, not the full twelve months. She sold a Texas rental property four months after moving; because she was a qualifying new arriver with no UK residence in the prior ten years, she elected into the FIG regime for that tax year, sheltering the US gain from UK tax entirely, at the cost of losing her UK Personal Allowance for the year.
On the US side, she filed Form 1040 reporting the Texas property gain and her UK consulting income, claimed the Foreign Tax Credit on Form 1116 for UK tax paid on the consulting income, and filed FBAR once her new UK current account pushed combined foreign balances over $10,000. Careful sequencing of the FIG election against the property sale date saved her a five-figure UK tax bill she would otherwise have owed on a purely domestic US transaction, and it illustrates why cross-border tax moving to the UK decisions rarely work in isolation from what is happening on the US return in the same year.
What records and structuring should happen before the move, not after?
Getting cross-border tax moving to the UK timed right depends on paperwork assembled before departure — prior UK residence history, FEIE/FTC election history, and asset cost bases — because HMRC and the IRS both expect precise dates, not estimates, once questions arise later. Sorting the paperwork trail before the move avoids months of reconstruction afterward and gives your adviser the actual figures needed to model the FIG election properly.
Pensions, investment accounts, and PFIC traps to check first.
Existing UK products bought after arrival — investment bonds, OEICs, unit trusts, and ISAs — routinely create PFIC reporting headaches for US persons under Form 8621, since the UK's own tax treatment rarely matches how the US taxes the same product. This is worth reviewing alongside UK investment bonds and PFIC traps for US persons before buying anything UK-wrapped, and alongside estate and investment planning before you relocate for the wider structuring picture. New UK business owners should also review whether starting a UK business after moving for permanent establishment and treaty implications.
Catching up on US filings that have lapsed
Anyone who has already relocated and quietly fallen behind on US returns or FBARs should look at catching up on unfiled US returns via Streamlined Filing rather than filing late and hoping nobody notices. High earners choosing between exclusion methods should read about the Foreign Tax Credit and FEIE, and anyone who may eventually head back stateside should plan based on what changes if they later move back to the US.
Plan your cross-border tax for your UK relocation with TaxYork before you book the removal van.
TaxYork's dual-qualified US-UK team models your Statutory Residence Test position, the FIG election, and your US filing obligations together, before the move rather than after the first UK payslip lands. Email hello@taxyork.com, call 020 3488 8606, or visit taxyork.com to get a written relocation tax plan covering both sides of the Atlantic.