US Taxes for Americans Living in the UK

Yes. The US taxes its citizens and Green Card holders on worldwide income regardless of where they live. Moving to the UK does not suspend or end your IRS filing obligation. You are required to file a US federal return every year your income exceeds the filing threshold — which in 2026 is $14,600 for single filers (2025 tax year).

The good news is that reliefs such as the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit mean most Americans in the UK owe little or nothing to the IRS once properly filed.

In most cases, no. The UK-US tax treaty and the Foreign Tax Credit are designed to prevent double taxation. Because UK income tax rates are generally higher than US rates, most Americans in the UK can offset their entire US tax liability using Foreign Tax Credits from HMRC taxes already paid.

Double taxation can become a real issue in specific situations — certain pension distributions, ISA income, or state-level obligations — which is why understanding the treaty and its Savings Clause matters.

FBAR (FinCEN Form 114) is a separate reporting requirement — not a tax form — that requires US persons to disclose foreign financial accounts if the total value exceeded $10,000 at any point during the year. Your UK current account, savings account, ISA, and even employer pension may all count.

FATCA (Form 8938) is a similar but distinct requirement filed with your tax return. The thresholds are higher, but the penalty for non-compliance is severe — up to $10,000 per violation. Most Americans with UK accounts need to file both.

TurboTax does have an expat flow, but it has limitations for complex situations involving UK pensions, ISAs, property sales, and treaty elections. It can handle straightforward employment income with FEIE or Foreign Tax Credit reasonably well.

For anything involving FBAR (which TurboTax does not file — it must be filed separately via FinCEN), ISA reporting, UK pension lump sums, or property CGT, expat-specific services like MyExpatTaxes or Taxfyle tend to handle the nuances more reliably.

No. UK ISAs are tax-free under HMRC rules, but the IRS does not recognise the ISA wrapper. Dividends, interest, and capital gains inside your ISA are fully taxable on your US return in the year they arise. The UK-US tax treaty does not extend ISA tax treatment to US persons.

A Stocks & Shares ISA may also trigger additional PFIC (Passive Foreign Investment Company) reporting rules, which carry complex and punitive tax treatment if not handled correctly. This is one of the more common pitfalls for Americans in the UK.

The IRS has two amnesty programmes designed for non-willful non-filers who were simply unaware of their obligations: the Streamlined Foreign Offshore Procedures (for those who have been living abroad) and the Streamlined Domestic Offshore Procedures. These allow you to file back returns with reduced or zero penalties.

Acting sooner is better than waiting — the IRS is increasingly sharing data with HMRC, and voluntary disclosure is always treated more favourably than detected non-compliance. A specialist expat CPA can guide you through the right procedure.

No. Naturalising as a British citizen while retaining your US citizenship does not affect your IRS obligations at all. You remain a US citizen, and the US taxes its citizens on worldwide income regardless of any other citizenship they hold.

The only way to end US tax obligations is to formally renounce US citizenship — which triggers a potential exit tax and has significant, permanent legal consequences. Renunciation is an irreversible step and should only be considered after specialist legal and tax advice.

Americans living outside the US automatically receive a two-month extension — making the standard deadline 15 June rather than 15 April. You can extend further to 15 October by filing Form 4868. FBAR (FinCEN 114) is due 15 April with an automatic extension to 15 October.

Note that these are filing deadlines, not payment deadlines. If you owe tax, interest accrues from 15 April regardless of the filing extension. See our full US tax deadlines guide for every date you need.