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US tax help for Americans living in the UK

Moving to the UK does not end your relationship with the IRS. Citizenship-based taxation means the annual Form 1040 follows you, and UK residence adds Self Assessment on top. The two returns describe the same income to two authorities under different rules — and they only work when prepared together.

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American in the UK

At a Glance.

Figures relate to tax year 2025 (US) · 2025-26 (UK)

Profile
US citizen living in London
Filings
Form 1040 + Self Assessment
Reporting
FBAR & Form 8938
Focus
Foreign tax credits
Outcome
Both returns, one position

  1. Two returns, one set of facts

    Your salary, your savings interest, your landlord income if you kept a US property — each item lands on both returns, but rarely in the same place or the same tax year. The UK taxes to 5 April; the US to 31 December. A preparer who sees only one side reconciles none of this.

    We prepare Form 1040 and Self Assessment as one engagement: the same specialist, the same working papers, and elections chosen because they work on both sides rather than optimised for one and repaired on the other.

  2. Credits before exclusions, usually

    UK tax rates are generally higher than US rates, which makes foreign tax credits the natural first tool: UK tax already paid offsets the US liability, and unused credit can carry forward. The Foreign Earned Income Exclusion is sometimes better, sometimes a trap — revoking it later has consequences.

    The right answer depends on your income mix, your pension contributions and where your life is heading. We model both routes before filing anything, and show you the comparison rather than asserting a rule of thumb.

  3. The accounts you already have

    A UK current account, a savings pot and a workplace pension can clear the FBAR threshold between them without any single account looking significant. Form 8938 sits on top with its own, higher thresholds. Neither raises tax; both carry penalties out of proportion to the effort of filing them.

    An ISA, so sensible in UK terms, is not tax-free to the IRS — and holding funds inside it can trigger PFIC reporting, the most punitive corner of the US code. We review what you hold before the reporting season, not after.

Services this usually involves
US federal returnsUK Self AssessmentFBAR & FATCA reportingPFIC reporting

Primary sources

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.

Questions, Answered.

Common questions

Do I really have to file a US return every year from the UK?
Yes. US citizens and Green Card holders file annually on worldwide income wherever they live, once ordinary filing thresholds are met. UK residence changes what goes on the return — exclusions, credits, treaty positions — but not the obligation itself.
Will I be taxed twice on the same income?
Usually not, if the returns are prepared together. Foreign tax credits, the treaty and, where appropriate, the Foreign Earned Income Exclusion exist to prevent double taxation — but they have to be claimed correctly and consistently on both returns.
Is my ISA a problem?
The ISA wrapper means nothing to the IRS: interest, dividends and gains inside it are taxable on the US return. Cash ISAs are usually manageable; stocks-and-shares ISAs holding UK funds can trigger PFIC reporting, which is worth addressing before it compounds.

Next Step.

Tell us what you hold — the scope and a fixed fee follow in writing.

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Other situations
British in the USAccidental AmericanDual CitizenMoving Across the AtlanticBusiness Owner