Introduction: The EB-1 Visa Changes Your Tax Position Before the Card Is Printed
The EB-1 visa is the fastest employment route to a US green card, and it changes a British executive's tax position on the day the petition is filed, not the day the card arrives. Most guides stop at one sentence. They say a green card holder pays US tax on worldwide income. That is true. However, it misses almost everything that matters to a senior Briton.
Most applicants for an EB-1 visa already live in America. They hold an L-1A or an O-1, and they already pass the day-count test for US residence. Therefore, the usual advice about planning before arrival is years too late for them. What they need to know is different. They need to know what the green card itself changes.
The answer is five things. The card removes the day count, switches off parts of the US-UK treaty, raises the price of the treaty tie-breaker and starts an exit tax clock. Moreover, the petition alone closes one exemption. At TaxYork, we prepare US and UK returns for British executives and founders on both sides of the Atlantic. This guide sets out each change, with the figures for 2026.
What the EB-1 Visa Is and Who Uses It
The EB-1 visa in three categories
The EB-1 visa is the first preference employment-based immigrant category. USCIS describes three EB-1 groups. The first, known as EB-1A, covers people of extraordinary ability in business, science, the arts or athletics. The second, EB-1B, covers outstanding professors and researchers. The third, EB-1C, covers multinational managers and executives.
None of the three needs a labour certification. Consequently, the EB-1 visa is far quicker than most employment categories. For applicants born in Britain, the State Department's Visa Bulletin has generally shown the category as current, so no long queue applies.
Who files the petition, and why it matters for tax
An EB-1A applicant files Form I-140 personally. No employer is needed. Founders and senior dealmakers favour this route for that reason. In contrast, a US employer files the petition for an EB-1C executive. That executive must have worked for the group outside America for one year in the previous three.
This difference has a tax edge. A self-petitioner controls the calendar. Therefore, an EB-1A founder can choose when the petition goes in and, to a degree, when status begins. An EB-1C executive depends on the company's timetable. Furthermore, the family follows the principal. A spouse and unmarried children under 21 receive green cards too, and each becomes a US taxpayer in their own right.
Adjustment of status or consular processing
There are two ways to finish the EB-1 visa process. A Briton already in America normally files Form I-485 to adjust status. A Briton still in London attends the US Embassy and receives an immigrant visa. That visa usually allows up to six months to make the first entry. As we show below, those two paths produce very different tax start dates.
When US Tax Residence Starts Under an EB-1 Visa
The green card test
The IRS applies two residence tests, both set out in section 7701(b) of the Internal Revenue Code. The first counts days. The second is the green card test. Under it, you are a US resident for tax if you hold lawful permanent resident status at any time in the year. No day count applies. Accordingly, an EB-1 visa green card holder who spends 300 days in London is still a US tax resident.
If you already live in America
For an executive already resident under the day-count test, the residency start date does not move. The IRS guidance on residency starting and ending dates confirms that the earlier date applies where you meet both tests. As a result, the day your EB-1 visa status is approved brings no new filing duty by itself. Your worldwide income was already taxable. Your UK accounts were already reportable.
Nevertheless, something important has changed. Before the card, you could end US residence simply by leaving and letting your day count fall. After the card, leaving is not enough. Residence continues until you formally give up the status or the authorities remove it.
If your family is still in London
For a spouse or founder who receives an EB-1 visa abroad, residence starts on the first day of presence in America as a permanent resident. That date is a choice. The six-month entry window can span a year end. Therefore, a first entry on 3 January rather than 20 December keeps a whole calendar year outside the US net. It also delays the first year on the exit tax clock, which we explain below.
The arrival year is usually a dual-status year. The IRS explains the rules for dual-status individuals. In short, you are a non-resident until the start date and a resident afterwards. However, a dual-status filer cannot claim the standard deduction and cannot file jointly without a special election.
Five Things the Green Card Changes for a Briton Already in America
The petition kills the closer connection exception
Some British executives split their time and stay under 183 US days a year. They rely on the closer connection exception to remain non-resident, and they file Form 8840 each year. The IRS withdraws that exception from anyone who has applied, or taken other steps, to become a permanent resident. Its list of disqualifying steps includes Form I-140 and Form I-485.
Consequently, the EB-1 visa petition itself ends the exception. It does so for the year of filing, even if the green card arrives two years later. In our experience, this is the most commonly missed point in the whole process. A commuter who files an I-140 in March can be a full US resident for that year under the day count, with worldwide income to report.
Several treaty benefits switch off
The US-UK treaty protects some benefits only for people who are neither US citizens nor green card holders. HMRC publishes the treaty and its protocol. The benefits lost on the day you become a permanent resident include Article 18(2). That provision lets a Briton working in America keep contributing to a UK pension scheme without US tax on the contributions.
For a seconded executive on the EB-1 visa route, that is costly. Employer contributions to a UK scheme become taxable US wages once the card arrives. Social security is separate, and the US-UK totalisation agreement continues to decide where you pay it. In contrast, Article 18(1) survives. Growth inside the UK pension stays deferred. The articles for government service, students and visiting teachers also fall away, although they rarely matter to our clients.
The treaty tie-breaker becomes expensive
An EB-1 visa green card holder who lives mainly in Britain can still claim UK residence under the treaty. The claim goes on Form 8833 with a non-resident return. However, the claim now carries two prices. First, the immigration authorities can treat a non-resident tax filing as evidence that you have abandoned permanent residence. It can also damage a later citizenship application.
Second, the tax law itself bites. For a long-term resident, a treaty claim of foreign residence is treated as giving up the green card for tax. That is an expatriation event, with the exit tax attached. We cover the mechanics in our guide to green card abandonment and the exit tax trap.
The exit tax clock starts
The expatriation tax applies to long-term residents. You become one when you have held a green card in at least eight of the last fifteen tax years. Importantly, any part of a year counts as a year. A card issued in December 2026 makes 2026 year one. The eighth year therefore begins on 1 January 2033, barely six years later.
A long-term resident who gives up the card is a covered expatriate if any one of three tests is met. For 2026, the tests are net worth of $2 million or more, average annual US income tax above $211,000 over five years, or a failure to certify five years of full compliance on Form 8854. A covered expatriate is treated as selling every asset the day before leaving. Gains above $910,000 are taxed.
Almost every holder of an EB-1 visa green card whom we meet clears the $2 million line. Therefore, the realistic choice is binary. Either you leave within seven calendar years, or you accept that leaving later means a deemed sale of your worldwide assets, including your UK company.
Residence no longer ends when you leave
A non-immigrant who returns to London simply stops being resident. A Briton who came through the EB-1 visa does not. Tax residence continues until you file Form I-407 or the status is revoked. An expired card is not enough. Consequently, we regularly meet Britons who moved home years ago, kept the card "just in case" and built up years of missed US tax returns and missed FBARs. A re-entry permit protects the immigration status, but it also confirms the tax status.
What to Fix Before the EB-1 Visa Is Approved
Your UK company
A UK company controlled by US shareholders is a controlled foreign corporation, and most founders on an EB-1 visa own one. Once you are a US resident, you report it each year on Form 5471. Its profits can be taxed to you personally under the net CFC tested income rules, even if no dividend is paid. For 2026, an individual faces rates up to 37% on that income unless an election or the high-tax exception applies.
The UK main rate of 25% normally clears the high-tax threshold of 18.9%. However, research reliefs and the Patent Box can pull the effective rate below it. Therefore, test the position every year. Alternatively, a UK limited company can elect on Form 8832 to be transparent for US tax. For a founder who is not yet US resident, making that election before the start date can reset the US cost base of the business without US tax. After residence begins, the same election is a taxable event.
ISAs, UK funds and missed reporting
An ISA has no special status in America. The income and gains are taxable each year. Furthermore, most UK funds and investment trusts held inside it are passive foreign investment companies, reported on Form 8621 under a punitive regime. HMRC explains how ISAs work for UK purposes, but none of that binds the IRS.
A family member whose EB-1 visa status has not yet begun has a simple fix. Sales inside an ISA are free of UK tax. Therefore, selling the funds before the residency start date and buying direct shares removes the fund problem and resets the US cost base at no tax cost in either country. After the start date, that door is shut.
UK accounts: FBAR and Form 8938
From your first resident year, you report every UK account on the FBAR if the combined balance passes $10,000. Pensions, ISAs and accounts where you only hold signing authority all count. In addition, Form 8938 applies at lower thresholds for people living in America. A single filer reports at $50,000 at year end, and a couple at $100,000. Our FBAR and FATCA service covers both. Missed reporting of a pension or investment account is the most common error we correct for new green card holders.
Gains and the pension lump sum
America gives no uplift in cost base when you become resident. A gain that built up over twenty years in Britain is fully taxable in the US if you sell after the start date. Accordingly, a family member who is still non-resident should review every large holding first.
The pension lump sum needs the same thought. Britain lets you take 25% of a pension free of UK tax. The treaty does not stop America taxing that sum in the hands of a US resident. Therefore, a Briton aged 55 or over who plans to draw the lump sum should consider doing so before US residence starts.
What HMRC Still Taxes After You Go
Leaving UK residence
The EB-1 visa does not end UK residence. The Statutory Residence Test does. Most executives leave under the full-time work abroad test, and they should tell HMRC on Form P85. A spouse who stays in the family home in Surrey with the children can remain UK resident for years. Meanwhile, that spouse may hold a green card. The result is dual residence, with two full returns each year and the treaty deciding who taxes first.
The five-year rule and the ten-year prize
Two UK time limits matter to an EB-1 visa family. First, the temporary non-residence rule taxes certain gains and company distributions if you return within five years. A founder who extracts a large dividend in year two and comes home in year four pays UK tax on it after all.
Second, the UK's four-year foreign income and gains regime rewards a long absence. A person who returns after ten full tax years of non-residence can claim it. Notably, ten UK tax years abroad will usually pass the eight-year US line. The two systems therefore pull in opposite directions. The US rewards leaving by year seven. Britain rewards staying away for ten.
UK property and income that follows you
Rent from a UK home stays taxable in Britain, under the rules for non-resident landlords. The US taxes it too and gives a credit for the UK tax. Similarly, bonuses and share awards earned during UK service keep a UK tax charge after you leave. For an EB-1 visa family, coordinating the credit is the core of our treaty and foreign tax credit work.
How the EB-1 Visa Compares With the Routes That Lead to It
The EB-1 visa rarely stands alone. Most EB-1C executives arrive on an L-1A, and we explain that stage in our guide to L-1 visa tax for British executives. Most EB-1A applicants begin on an O-1, covered in our guide to O-1 visa tax for British talent. Investors use a different category, which we discuss under EB-5 visa tax.
The contrast is simple. A non-immigrant visa makes you a US taxpayer by counting days, and it lets you stop by leaving. The EB-1 visa makes you a US taxpayer by status, and it holds you until you formally let go. Therefore, the decision to file is a tax decision with a fifteen-year horizon.
Case Study: A London Founder, an EB-1C Petition and a Family in Surrey
The following example is illustrative. James, aged 48, founded a UK software group and owns 60% of the parent company. He moved to New York on an L-1A in August 2024 to run the US subsidiary. He has been a US tax resident since then. His wife, Helen, stayed in Surrey while their children finished school. His employer filed an EB-1 visa petition in the EB-1C category in January 2026, and his green card arrived in September 2026.
Three things changed for James. First, his UK employer still paid £45,000 a year into his UK pension. Until September, Article 18(2) kept that out of his US income. Afterwards it became taxable wages. At 37%, the annual federal cost is about $22,000 on $59,400 of contributions. We arranged for the contributions to stop and for his US plan to take over.
Second, his exit tax clock started. The year 2026 is year one. He becomes a long-term resident on 1 January 2033. His stake in the UK parent carries an unrealised gain of $6 million. If he gave up the card in 2033, the deemed sale would tax $5,090,000 after the $910,000 exclusion, using 2026 figures. At 23.8%, that is about $1,211,000. Therefore, the family diary now carries a decision date of late 2032.
Third, Helen's position was still open. She received her immigrant visa in October 2026 and could enter at any time before April 2027. Her ISA held $520,000 of UK funds with a $190,000 gain. Before travelling, she sold the funds inside the ISA and bought direct shares. No UK tax arose. Her US cost base became $520,000. The US tax avoided on that gain alone is $45,220 at 23.8%, before counting the fund penalties she escaped. She then made her first entry on 4 January 2027. As a result, 2026 stayed outside her US return, and her own exit tax clock began a year after her husband's.
How TaxYork Can Help
TaxYork provides comprehensive US and UK tax return preparation for British executives and founders holding or seeking an EB-1 visa green card. We prepare the dual-status return for the arrival year, the Form 5471 for your UK company, the Form 8621 for any remaining funds, and the FBAR and Form 8938 for every UK account. In addition, we prepare the UK side, including the P85, split-year claims and non-resident landlord returns.
We also correct the past. Where a green card holder has returned to Britain and missed US tax returns or FBARs, we prepare the catch-up filings through our US tax return service. Specifically, we map your eight-year date in the first engagement, so that no year passes by accident.
Conclusion
An EB-1 visa is a tax event long before it is a plastic card. The petition ends the closer connection exception. The card removes the day count, switches off Article 18(2), raises the cost of a treaty claim and starts an eight-year clock that can end in a deemed sale of everything you own. Nevertheless, each of those costs has a date attached, and dates can be planned. A family member still in Britain has the most room, because sales, elections and the first entry can all be timed. Above all, know your start date and your eighth year before you sign the petition.
Contact Us
If you hold an L-1A or O-1 and an EB-1 petition is planned, or your family will follow you from Britain, speak to us before anything is filed. You can book a consultation to review your US and UK filing position in confidence. Email hello@taxyork.com or call 020 3488 8606.
Disclaimer
This article provides general information only and reflects US and UK rules as understood in October 2026. It is not tax, legal or immigration advice for your circumstances. Immigration processing times, visa availability and tax thresholds change, and the treatment of a company, pension or investment depends on its facts. The case study is illustrative. Always obtain professional guidance from a qualified specialist before you act. TaxYork accepts no liability for action taken in reliance on this article.