US Taxes for Americans Living in the UK

Yes. The US taxes its citizens and Green Card holders on worldwide income wherever they live, so moving to the UK does not end your IRS filing obligation. For the 2025 tax year you must file if your gross income is at least $15,750 as a single filer or $31,500 married filing jointly, and at $400 of net self-employment income. The Foreign Earned Income Exclusion ($130,000 for 2025 and $132,900 for 2026) and the Foreign Tax Credit mean most Americans in the UK owe little or nothing once they file correctly.

Usually not. The UK-US tax treaty and the Foreign Tax Credit are designed to stop the same income being taxed twice. Because UK income tax rates are generally higher than US rates, many Americans in the UK can offset their US tax on UK salary with credits for the UK tax already paid. Double tax can still arise on some pension withdrawals, ISA income, investment funds and state taxes.

FBAR (FinCEN Form 114) is required if the combined value of your non-US financial accounts went above $10,000 at any point in the year. UK current and savings accounts, ISAs and some pensions can all count. FATCA (Form 8938) is a separate form filed with your tax return: if you live abroad it applies once your foreign assets exceed $200,000 at year end or $300,000 at any time as a single filer, or $400,000 and $600,000 if married filing jointly. Many people file FBAR only; you file both once you pass both thresholds.

TurboTax and similar software can handle straightforward employment income with the Foreign Earned Income Exclusion or the Foreign Tax Credit. They are weaker on UK pensions, ISAs, investment funds, property sales and treaty positions. FBAR is filed separately with FinCEN. If your situation is more complex, an expat-focused service or a specialist accountant is usually the safer choice.

No. ISAs are tax-free under HMRC rules, but the IRS does not recognise the ISA wrapper, and the UK-US treaty does not extend ISA treatment to US persons. Interest, dividends and gains inside an ISA are taxable on your US return. UK funds held in a Stocks and Shares ISA can also count as PFICs, which bring extra reporting and harsh tax treatment.

If your failure to file was not wilful, the IRS Streamlined Foreign Offshore Procedures let Americans living abroad catch up by filing the last three years of tax returns and six years of FBARs, usually without penalties. Acting before the IRS contacts you matters, because UK banks report US account holders to HMRC, which passes the information to the IRS under FATCA.

No. Becoming British while keeping your US citizenship does not change your IRS obligations. The only way to end them is to formally renounce US citizenship, which costs $450 (down from $2,350 since 13 April 2026), can trigger the exit tax for some people and is permanent.

If you live outside the US on the normal due date you get an automatic extension to 15 June, and you can extend to 15 October by filing Form 4868. FBAR is due on 15 April with an automatic extension to 15 October. These are filing deadlines only: interest on any tax owed runs from 15 April.