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If you are a US national considering moving to the UK, then you need to be aware of the recent changes to the UK non-domicile ("non-dom") tax regime, which abolishes the old rules and introduces a new "tax holiday" system for individuals relocating to the UK. For many US citizens moving to the UK, this reform is the biggest change to personal tax planning in decades.
Where many UK non-doms could historically keep offshore income outside the scope of UK tax by avoiding remittance, Americans have never had that option. For US citizens and Green Card holders, their lifetime relationship with the Internal Revenue Service means US federal income tax already applies globally, regardless of residence. As the UK's new framework moves long-term residents towards full taxation on worldwide income, Americans now face two complex systems at once.
Understanding UK Tax Residence for US Nationals
Whether a US citizen moving tothe UK becomes taxable in the UK depends on the Statutory Residence Test (SRT). The SRT assesses UK residency primarily by reference to days spent in the UK and specific "ties," such as having a UK home, family presence or substantive UK employment. Spending 183 days or more in the UK during a tax year results in UK residency automatically, while at lower day counts, residency can still be claimed by HMRC if "sufficient ties" to the UK exist. If a US citizen moving to the UK remains non-resident, UK taxation generally applies only to UK-source income, such as employment income earned in the UK or rental income from UK property.
The four-year FIG regime: A crucial window for US citizens moving to the UK
From 6 April 2025, new UK residents who have not been UK-resident for the prior 10 tax years may qualify for the FIG regime. During this period, overseas income can be remitted to the UK without generating a UK tax charge, and therefore for US citizens moving to the UK, this gives a clear 4-year planning window to make major financial decisions, capital movements, restructurings, or liquidity events.
Double tax exposure for Americans moving to the UK
US citizens relocating to the UK remain subject to immediate US reporting obligations and income tax on all global earnings. Under the new UK tax regime, the same income streams will become liable to UK tax after a qualifying period of UK residence (4-years), which creates of potential for double taxation of income, investment returns, and trust distributions in both jurisdictions.
The current UK-US tax treaty offers relief mechanisms aimed at preventing double tax charges, but tax credits are dependent on classification rules that restrict how one country's tax can offset the other's liability. For income such as US-source dividends or passive investment gains, credit relief may not be fully available. The ultimate tax burden will generally reflect whichever jurisdiction applies the higher effective rate to the income concerned, making forward-looking tax planning critical rather than optional.
Considerations for Americans already resident in the UK
US citizens who moved to the UK prior to 2025 may access transitional measures, including the Temporary Repatriation Facility (TRF), which permits previously untaxed offshore income earned before 6 April 2025 to be brought to the UK at reduced flat rates. Income repatriated under the TRF is taxed at 12% in 2025/26 and 2026/27, rising to 15% in 2027/28.
The introduction of asset rebasing rules further complicates matters. Although rebasing can lower UK capital gains tax exposure, it does not reduce US tax liability calculated against original acquisition cost. Consequently, sales may still trigger substantial US capital gains tax even where UK exposure is reduced.
Trust Structures for US citizens moving the UK
Trust arrangements remain highly relevant for US settlers, particularly those who created excluded property or grantor trusts prior to residency. Under the new FIG regime, trust income will remain outside the UK tax net for the first four years of UK residence. Where trusts become settlor-interested after this threshold, protections are likely to be lost, creating exposure to UK taxation on income already assessed in the US. Some other popular assets with US expats, such as offshore insurance bonds, also do not qualify for exemptions under the FIG regime and remain taxable in the UK as they arise. Read more on our guide to protecting wealth internationally.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
