Financial Planning for Americans in the UK
Living in the UK as an American creates one of the more complex cross-border financial planning situations.
You may need to deal with:
US tax filing
UK tax residence
the US-UK tax treaty
foreign earned income exclusion
foreign tax credits
state tax issues
FBAR reporting
FATCA reporting
UK bank accounts
ISAs
UK pensions
SIPPs
workplace pensions
401(k), IRA and Roth IRA accounts
US brokerage accounts
UK investment accounts
PFIC exposure
UK reporting funds
property
estate planning
non-US spouse planning
currency
future relocation
The challenge is that a decision can look sensible in one country and problematic in the other.
An ISA may be tax-efficient in the UK, but not necessarily simple for a US taxpayer.
A UK fund may look normal locally, but may create PFIC issues for a US person.
A Roth IRA may be valuable, but the UK treatment needs to be reviewed carefully.
A US brokerage account may work while you are in the US, but access can become harder when you live abroad.
The question is not only:
What should I do with my money while living in the UK?
The better question is:
How do I build a financial plan that works across both the US and UK tax systems?
What should Americans in the UK review financially?
Americans in the UK should review how US tax, UK tax, retirement accounts, pensions, investments, reporting, estate planning and future relocation work together.
A review should usually consider:
- US citizenship or green card status
- UK tax residence
- whether US tax filing continues
- whether UK tax filing is required
- whether foreign earned income exclusion is relevant
- whether foreign tax credits are more appropriate
- whether state tax remains an issue
- US-UK treaty coordination
- UK bank accounts
- FBAR reporting
- FATCA reporting
- Form 8938 reporting
- ISAs
- UK general investment accounts
- UK funds and ETFs
- PFIC exposure
- UK reporting fund status
- 401(k), IRA and Roth IRA accounts
- UK pensions and SIPPs
- Social Security
- UK State Pension
- US brokerage access
- currency and future spending needs
- property in the US, UK or elsewhere
- life insurance and protection
- wills and estate planning
- non-US spouse planning
- future moves to the US, UAE, Europe or another country
The IRS says US citizens and resident aliens abroad are generally subject to US tax on worldwide income.
That means moving to the UK does not remove the US from your financial planning.
At the same time, UK residence can bring UK tax, investment and pension rules into scope.
The planning problem is not one country or the other.
It is the interaction between both.
What US-UK planning issue do you need to review?
US retirement accounts in the UK
Review 401(k), IRA, Roth IRA, TSP, old employer plans, rollovers, withdrawals, RMDs and beneficiaries while living in the UK.
Roth IRA treatment in the UK
Roth IRA planning should be reviewed carefully for treaty treatment, contributions, withdrawals, conversions and future residence.
ISAs and investments
ISAs, UK funds, ETFs and GIAs can be tax-efficient locally but may create US tax or PFIC issues for Americans.
PFICs and UK funds
US citizens in the UK should understand PFIC exposure before buying UK mutual funds, ETFs, investment bonds or platform portfolios.
The UK can be financially familiar, but for Americans it creates a highly technical cross-border planning environment.
Who this page is for
US citizens, green card holders, dual US/UK nationals, American executives, professionals, entrepreneurs, families and US-connected individuals living in the UK.
Main areas to review
US tax, UK tax, treaty coordination, FBAR, FATCA, 401(k), IRA, Roth IRA, UK pensions, ISAs, GIAs, PFICs, property, estate planning and currency.
Main planning risks
Assuming UK tax efficiency also works for the US, buying PFICs, using ISAs without US analysis, ignoring US retirement accounts, poor currency planning and weak estate planning.
Common trigger points
Moving to the UK, becoming UK resident, joining a UK pension, opening an ISA, receiving employer stock, selling property, retiring, marrying a non-US spouse or returning to the US.
Planning outcome
A coordinated US-UK plan for savings, investments, pensions, tax reporting, retirement accounts, estate planning, currency and future relocation.
The UK is not a simple planning environment for Americans
The UK can feel familiar.
It has developed financial markets, pensions, ISAs, investment platforms, property markets and a mature advisory profession.
But for Americans, that familiarity can be misleading.
A UK financial product may be perfectly normal for a UK resident, but unsuitable or tax-inefficient for a US taxpayer.
Common examples include:
- ISAs
- UK mutual funds
- UK ETFs
- offshore bonds
- UK general investment accounts
- platform model portfolios
- UK pension contributions
- SIPPs
- workplace pensions
- employer stock plans
- trust structures
- property ownership
- inheritance planning
The issue is not that these are always wrong.
The issue is that they need US-aware review.
A financial plan for an American in the UK should answer:
- am I still filing US tax returns?
- am I UK tax resident?
- do I have remaining state tax exposure?
- are my investments US-compliant?
- do I own PFICs?
- are my UK funds reporting funds?
- are my ISAs suitable for my US tax position?
- how are my UK pensions treated in the US?
- how are my US retirement accounts treated in the UK?
- should I keep, roll over or withdraw from my 401(k)?
- how should I treat a Roth IRA?
- what currency will I spend in retirement?
- where will I live later?
- does my estate planning work across both countries?
The goal is not to build a US-only plan or a UK-only plan.
The goal is to build a plan that survives contact with both systems.
Documents to gather before a US-UK financial planning review
US tax position
Gather recent US tax returns, CPA advice, foreign earned income exclusion claims, foreign tax credit records, Form 8938 filings, FBAR filings and state tax advice.
UK tax position
Gather UK tax returns, PAYE records, self-assessment details, remittance basis advice, residence advice and any UK tax planning correspondence.
US retirement accounts
Collect statements for 401(k), IRA, Roth IRA, TSP, 403(b), 457(b), SEP IRA, SIMPLE IRA, inherited IRA and other US retirement accounts.
UK pensions
Gather statements for workplace pensions, personal pensions, SIPPs, old UK pensions, defined benefit schemes and pension contribution records.
Investment accounts
Collect statements for US brokerage accounts, UK general investment accounts, ISAs, offshore bonds, UK funds, ETFs, managed portfolios and employer stock.
Bank accounts and cash
List US and UK bank accounts, savings accounts, cash balances, currencies, interest rates, emergency reserves and planned large expenses.
Foreign account reporting
Gather FBAR filings, Form 8938 filings and details of non-US bank, pension, investment and insurance accounts.
Property
Gather details of property in the UK, US or elsewhere, including mortgages, rental income, purchase plans, sales and expected future residence.
Estate planning documents
Review US wills, UK wills, powers of attorney, guardianship documents, trusts, beneficiary forms and life insurance nominations.
Future relocation plans
Clarify whether you expect to remain in the UK, return to the United States, move to the UAE, move to Europe, retire abroad or keep assets across several countries.
These related pages cover the most common US-UK financial planning issues.
401(k) after moving to the UK
Review provider access, investment choice, fees, rollovers, withdrawals, RMDs, tax and beneficiaries after moving to the UK.
Returning to the UK with US accounts
If you are moving back to the UK with a 401(k), IRA or Roth IRA, review tax, treaty, currency, withdrawal and estate planning issues.
UK pensions and US tax
UK pensions, SIPPs and workplace pensions should be reviewed for US tax, treaty, reporting, contribution and withdrawal treatment.
ISAs for Americans
ISAs can be tax-efficient for UK tax, but Americans should review US tax, reporting, PFIC and investment issues before using them.
Related financial planning services
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View Financial PlanningRelated Links
- Financial planning for Americans abroad
- Financial planning for foreign nationals living in the US
- US retirement accounts for expats
- 401(k) planning for expats
- IRA and Roth IRA planning for expats
- Retirement planning for Americans abroad
- Investment planning for Americans abroad
- Former US residents with US retirement accounts
- Book a call with Josh Clancey
Financial planning for Americans in the UK FAQs
Important information
This page is for general information only and does not constitute personalised financial, tax, legal, investment, pension transfer, retirement, estate planning, insurance, immigration, UK residence, US tax, UK tax or currency advice.
US tax, UK tax, UK residence, the US-UK tax treaty, foreign earned income exclusion, foreign tax credits, FBAR, FATCA, Form 8938, 401(k), IRA, Roth IRA, UK pensions, SIPPs, ISAs, GIAs, PFICs, UK reporting funds, offshore bonds, foreign investments, property, estate planning, wills, trusts, beneficiaries and future relocation depend on personal circumstances and may change.
US tax advice should be taken from a suitably qualified US tax adviser or CPA. UK tax and legal advice should also be taken where relevant.
Financial planning should be coordinated with legal, tax, pension, investment, insurance and estate planning advice where appropriate.
Investing involves risk. Pension, retirement account and investment values can fall as well as rise, and you may get back less than you invest.
Currency movements can affect the value of cash, investments, transfers, retirement accounts and income.
