UK/USA Expats Living in the USA: Key Tax Considerations You Need to Know

Life as a UK Expat in the USA

Life as a UK Expat in the USA

Moving to the USA brings exciting opportunities—but also new challenges when it comes to your taxes. Whether you’ve relocated for work, family, or lifestyle, it’s important to understand how your UK and US tax obligations overlap.

At Avante Tax, we work with UK/USA expats every day, making sure they stay compliant while maximising tax efficiency.

The Big Question: Do I Have to File in Both Countries?

The short answer: Yes, often you do.

• USA: As a US tax resident (green card holder, visa holder, or substantial presence test), you must report worldwide income to the IRS.

• UK: If you still have UK ties—such as rental property, a pension, or dividends—you may still need to file with HMRC.

That’s where the UK–US Double Taxation Treaty comes in. It ensures you don’t pay tax twice on the same income, but you must file correctly to claim relief.

Common Tax Traps for UK Expats

1. Rental Income from UK Property

   • Still taxable in the UK.

   • Must also be declared in the USA.

   • You can often claim foreign tax credits to offset.

2. Pensions

   • Private pensions are generally taxed in the country of residence (USA).

   • UK State Pension is also reportable to the IRS, even if it feels like “free” income.

3. Bank Accounts and Investments

   • US rules (like FATCA and FBAR reporting) require disclosure of foreign accounts.

   • UK ISAs are not tax-free in the USA—a common surprise for new expats.

4. Currency Exchange

   • Moving money between UK and US can create taxable gains depending on exchange rates.

How to Stay Compliant

✅ Keep records of your income in both countries.

✅ Understand the UK–US tax treaty and how it applies to your situation.

✅ Apply for an NT tax code if you qualify, to prevent unnecessary UK tax withholding.

✅ File your returns on time in both the UK and USA.

Why Work with an Expat Tax Specialist?

Cross-border tax is not straightforward—and mistakes can be costly. At Avante Tax, we:

• Prepare both UK and US tax returns.

• Advise on NT tax codes, foreign tax credits, and treaty benefits.

• Guide you on pensions, ISAs, and UK rental property tax treatment.

• Simplify compliance so you can focus on building your life in the USA.

✨ Next Steps

👉 Book a free consultation with Avante Tax to make sure you’re fully compliant in both the UK and USA—and not paying a penny more than you need to.

We’ll handle the complexities of expat tax so you can enjoy peace of mind abroad.