Figures relate to tax year 2025 (US) / 2025-26 (UK)
Britain charges no exit tax on most assets when you leave. America offers no fresh start when you arrive. So a holding you bought in 2012 carries its whole gain into the US system, waiting quietly for the day you sell.
Moving to the US therefore calls for a deliberate reset before departure, and the timing decides whether it works. So this guide covers the base cost problem, the 30-day trap that undoes a careless fix, and the company and trust interests needing the same attention.
Key takeaways
- America taxes the whole gain from your original purchase, not from your arrival date.
- Selling and repurchasing before departure resets the cost the IRS will use.
- Buy the same holding back within 30 days and UK rules cancel the reset.
- A UK company becomes a controlled foreign corporation once its owner is American.
- Trust interests and family gifts need mapping before residency starts, not after.
What is a base cost reset?
A base cost reset is a sale and repurchase that raises the price the IRS treats you as having paid. You sell while still outside the US system, pay any UK tax, then buy back at today's value. Your future US gain runs from that higher figure.
It works because America starts taxing you on a date, not on a value. Nothing in the rules marks your assets to market when you land. Only a real disposal changes the number the IRS will one day use.
The IRS does not care when you arrived. It cares what you paid, however many years ago that was.
Why does the 30-day rule matter?
Because Britain matches a disposal against any repurchase of the same asset within the following 30 days. Sell on Monday and buy back on Wednesday, and HMRC treats you as never having sold at all. The gain you meant to crystallise vanishes, and so does the reset.
Three routes avoid it. You wait 31 days before repurchasing, you buy a similar but not identical holding, or the repurchase happens inside a different wrapper such as a pension. Each keeps the disposal real for UK purposes.
Market movement during the gap is the genuine risk. In our practice most people accept a few weeks of exposure, because the tax saved usually dwarfs the likely swing. That judgement belongs with your investment adviser as much as your accountant.
What does the reset cost in Britain?
Usually far less than the US tax it prevents. For 2025-26 the annual exempt amount is £3,000, and the main capital gains rates are 18% and 24%. Couples can transfer holdings between themselves first, so both exemptions come into play.
According to the GOV.UK guidance on capital gains tax (opens in a new tab), transfers between spouses happen at no gain and no loss. That makes splitting a portfolio before the sale one of the simplest steps available to a married couple.
| Position | Sold before departure | Kept and sold later in America |
|---|---|---|
| Gain taxed in Britain | Yes, at 18% or 24% | No |
| Gain taxed in America | Only growth after repurchase | The whole gain since purchase |
| Annual exemption available | Yes, £3,000 each | No equivalent |
| Repurchase timing | Wait 31 days to keep the reset | Not applicable |
Which assets deserve the review?
Anything holding a large unrealised gain. Listed shares and funds sit at the top of the list, followed by second homes, business shares and long-held investments. Their gains are typically the largest, so the saving is largest too.
Some assets need the opposite treatment. Losses are worth keeping, because America can use them against future gains. Holdings you plan to sell within a year rarely justify the exercise, since the reset saves little over such a short period.
Your main home follows its own rules in both countries, so treat it separately. Our guide to moving back to the US covers the wider relocation checklist, including pensions and the state you arrive in.
What happens to a UK company you own?
It becomes a controlled foreign corporation once a US person owns enough of it. That brings Form 5471 every year, and it can tax profits you never took out of the company. The reporting alone is substantial, and penalties for missing it are severe.
Owners therefore look hard at the structure before moving to the US. Selling the company, winding it up, or paying out retained profits while still British can all make sense. Each option needs testing against UK tax first, because the cheapest American answer is not always cheapest overall.
Sole traders face a simpler version. Your profits become US taxable as self-employment income, although a certificate of coverage usually keeps social security contributions in one country rather than two.
How do you run the review?
Work backwards from your expected arrival date, allowing at least two months for settlement and the 30-day gap. Anyone moving to the US in the spring should therefore start over the winter. The order below keeps each option open:
- List every asset with its purchase date, cost and current value.
- Mark the holdings carrying the largest unrealised gains.
- Transfer holdings between spouses where that uses both exemptions.
- Sell the chosen assets and diary the repurchase for 31 days later.
- Repurchase, then record the new cost and the date in writing.
- Map any company, partnership or trust interest you hold.
- Keep valuations and contract notes with your permanent tax records.
Per the IRS guidance on residency starting dates (opens in a new tab), residence usually begins on your first day of presence in the year you meet the day-count test. Everything above needs finishing before that date.
What about assets you cannot sell?
Some holdings resist the reset entirely. Unquoted company shares, property and pension pots cannot be sold and rebought on a whim, and forcing a disposal can cost more than the tax it saves.
Property is the clearest case. Selling a rental flat to reset its cost would trigger stamp duty on the repurchase, legal fees and a void period. Most owners simply accept the American exposure and plan around the eventual sale.
Unquoted shares need a valuation, which adds cost and uncertainty. Where a sale is realistic anyway, timing it before moving to the US is usually worth modelling properly.
A worked example
Take an illustrative example. An engineer in Bristol holds a fund bought for £40,000 in 2014, now worth £100,000. She accepts a job in Boston starting in March 2026.
She sells in January, sets her £3,000 exemption against the £60,000 gain, and pays UK tax on the rest. She waits 31 days, then buys the fund back at £100,000. Her US base cost becomes £100,000 rather than £40,000.
Had she kept the holding, America would eventually have taxed the full £60,000 of British growth as well as anything earned afterwards. One month of planning removed a gain built over twelve years.
Do family gifts and trusts need attention too?
Yes, and people forget them easily. While you remain outside the US system, gifts you make to family sit outside US gift tax entirely. Once you count as American for tax purposes, those same gifts start using part of your lifetime exemption.
Trust interests matter more still, because reporting can begin before any money reaches you. A place in a British family trust brings annual disclosure once you become a US resident, so map the structure before the move rather than after a notice arrives.
When does the day count decide everything?
Whenever your move falls near a year end. US residence usually starts in the year you meet the substantial presence test, which counts this year's days, a third of last year's and a sixth of the year before. Frequent business visitors cross that line earlier than they expect.
So the arrival date is itself a planning tool. Landing in early January rather than late December can leave an extra year for the review above, and it keeps the previous year's gains outside the American net.
Who should skip this exercise?
Plenty of people, and honesty about that saves fees. If your portfolio is small, your gains modest, or your stay in America likely to be short, the reset may not repay the dealing costs and the market risk.
Short postings are the clearest example. Someone moving to the US for two years on secondment, holding a few thousand pounds of shares, gains little from selling and rebuying. The company and trust questions still deserve a look, because those bring reporting duties rather than tax.
The mistakes people make when moving to the US
Each of these appears regularly, and each costs real money. None require unusual circumstances:
- Assuming asset values reset automatically on arrival.
- Repurchasing within 30 days and cancelling the disposal for UK purposes.
- Selling assets standing at a loss, which America could have used later.
- Overlooking a UK company until the first Form 5471 penalty notice.
- Leaving the review until the final fortnight before the flight.
- Forgetting to record the new base cost and the date of repurchase.
Investment wrappers deserve separate thought, because America ignores most British shelters. Our guide to the ISA and PFIC problem explains why funds inside an ISA cause particular trouble.
What does Britain need from you?
You report the disposals on your Self Assessment return for the year of sale, whether or not you have left by the filing date. Residence for that year follows the statutory residence test, and split-year treatment often applies. Our guide to the UK statutory residence test sets out how HMRC counts your days.
Keep contract notes, valuations and bank records from the whole exercise. Both tax authorities may ask about the same transactions years apart, and the paperwork is far easier to assemble now than later.
How US UK Tax Accountants helps
We review your holdings, model the reset against both tax systems, and set out what to sell and when. Our treaty relief service covers the arrival year alongside the reliefs that carry across the Atlantic.
In our practice this work repays itself many times over, provided it starts early enough. We agree a fixed fee in writing before anything begins, so the cost is clear from the outset.
Start the review early
If you are moving to the US within the next year, the asset review belongs near the top of your list. Tell us what you hold and when you expect to travel. You can book a consultation and hear back within one working day.
Last reviewed 12 September 2026 by the US UK Tax Accountants Tax Team. This article is general information, not personal tax advice — speak to a qualified US/UK tax adviser about your own position.
For the neighbouring question, Selling a UK business as an American: the relief Britain gives and America ignores walks through it in detail.
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Official guidance from the IRS, FinCEN and GOV.UK. Thresholds and rates on those pages are updated annually — check the current tax year before relying on a figure.
