If you are a UK expat living in the USA, you face one of the most complex cross-border financial situations. The US taxes residents on worldwide income and has extensive reporting requirements for foreign assets. Your UK pension, US tax filing obligations, currency, estate planning and investment choices all need careful consideration. This guide covers the key questions worth asking — it does not provide personalised tax advice.
Your UK pension
Your UK pension remains yours when you move to the USA. You can generally leave it where it is — you do not have to transfer it.
Key questions:
- Can I leave my UK pension where it is? Yes, in most cases. See our guide: I Live Abroad – What Happens to My UK Pension?
- How are UK pension withdrawals taxed in the US? The US tax treatment of UK pensions is complex. The US-UK double taxation treaty provides some guidance, but the IRS may treat UK pension distributions differently depending on the pension type. You may need to report your UK pension on FBAR and FATCA filings. Consult a cross-border UK-US tax specialist.
- Should I transfer my UK pension to a US retirement account? This is generally not straightforward and may not be possible or advisable. UK pensions and US retirement accounts (401(k), IRA) are governed by different rules. Never attempt a transfer without specialist advice.
- Can I keep my SIPP? Yes. Whether you can continue contributing depends on UK relevant earnings.
Source: GOV.UK — Tax on your private pension contributions
Existing UK investments
Your existing UK investments remain yours but their US tax treatment can be complex.
Key questions:
- Are my ISAs recognised in the US? ISAs are a UK tax wrapper. The US does not recognise the ISA wrapper for tax purposes. Investments within an ISA may be subject to US tax, and PFIC rules may apply to non-US funds held within an ISA. Consult a US tax specialist.
- How are UK investments taxed in the US? US residents are taxed on worldwide income, including UK investment income and capital gains. The US-UK double taxation treaty may provide relief from double taxation.
- Are my UK investment funds PFICs? Many UK and non-US investment funds are classified as Passive Foreign Investment Companies (PFICs) by the IRS. PFICs are subject to complex and generally unfavourable US tax rules. See our guide: US Citizen Living in Europe – Finding the Right Financial Advice for more on PFIC rules.
US tax filing obligations
US tax filing obligations are extensive for residents with foreign assets.
Key questions:
- Do I need to file FBAR? US residents with foreign financial accounts exceeding $10,000 in aggregate at any time during the year must file an FBAR (FinCEN Form 114). UK pensions, bank accounts and investment accounts may need to be reported.
- Do I need to file FATCA (Form 8938)? US residents with specified foreign financial assets exceeding certain thresholds must file Form 8938. The thresholds depend on your filing status and whether you live in the US or abroad.
- Do I need to file a UK tax return? Possibly, if you have UK income or capital gains. Your UK tax residency status determines your UK filing obligations.
Source: IRS — Report of Foreign Bank and Financial Accounts (FBAR)
Can your existing adviser continue advising you?
Many UK financial advisers are only authorised to advise UK residents. When you move to the USA, your adviser may not have the regulatory permission to provide advice to you.
Key questions:
- Is my UK adviser regulated to advise clients in the USA? Most UK advisers are not. US financial advice is regulated at both federal and state level. Ask your adviser directly.
- If not, how do I find an adviser who understands both UK and US rules? You need an adviser who understands UK assets (pensions, investments) and US tax rules (including PFIC, FBAR and FATCA). See our guide: How Do I Find the Right Financial Adviser When Living Abroad?
US residence and tax
When you become a US tax resident, you are taxed on your worldwide income.
Key questions:
- Am I a US tax resident? If you are a US permanent resident (green card holder) or you meet the substantial presence test, you are likely a US tax resident.
- What is my UK tax residency status? The UK uses the Statutory Residence Test. The US-UK double taxation treaty tie-breaker rules determine which country has primary taxing rights if you are resident in both.
- How does the US-UK treaty help? The treaty provides mechanisms to avoid double taxation, but the rules are complex. A cross-border tax specialist is essential.
Source: GOV.UK — Tax if you leave the UK to live abroad
Currency
If you have income or assets in GBP but your living costs are in USD, currency fluctuations can have a significant impact.
Key questions:
- How do I manage GBP/USD currency risk? Consider a currency management strategy, including regular transfer arrangements.
- Should I hold investments in GBP or USD? This depends on your spending needs and long-term plans. A regulated adviser can help.
Estate planning
US estate planning is complex for UK expats, particularly because the US has an estate tax and the UK has inheritance tax, and the two systems interact in ways that require specialist advice.
Key questions:
- Do I need a US will? Yes. A US will can help ensure your US assets are distributed according to your wishes.
- How does US estate tax work? The US has an estate tax with a high exemption threshold (which changes over time). The UK has inheritance tax. The US-UK estate tax treaty may affect which country's rules apply. Seek specialist estate planning advice.
- Does my UK will still work in the US? A UK will may be recognised in the US, but having a US will for US assets is generally recommended.
- What about UK inheritance tax if I live in the US? UK inheritance tax may still apply to UK assets. The rules depend on your domicile status, which is different from tax residency. Consult a specialist.
Source: GOV.UK — Inheritance tax and double taxation relief
Returning to the UK
If you return to the UK, your tax position will revert to UK rules.
Key questions:
- What happens to my US assets if I return to the UK? They remain yours, but their UK tax treatment will depend on your UK tax residency and domicile status.
- Do I need to notify anyone when I return? You should notify HMRC and the IRS of your change of residence.
Moving elsewhere later
If you move from the USA to another country, your financial situation will change again.
Key questions:
- Can my adviser continue advising me? Your adviser may need to be regulated in your new country of residence. Ask before you move.
- What happens to my US tax obligations? If you cease to be a US tax resident, your US filing obligations may change. However, if you are a US citizen, your US tax filing obligations continue regardless of where you live.
Finding an appropriately regulated adviser
To find an adviser who understands both UK and US rules:
- Check they are regulated in the USA — at federal and/or state level
- Ask about their experience with UK expats in the USA
- Ask about their knowledge of UK pensions, investments and UK tax rules
- Check they understand US reporting requirements (FBAR, FATCA, PFIC)
- Ask whether they work with a UK tax specialist — cross-border UK-US situations often require coordinated advice
Link Independent is a curated introduction service that helps expats and internationally mobile clients connect with appropriately regulated financial advisers based on their circumstances. Find an adviser or use the Expat Planner to get started.
Finding the right professional
Different circumstances can require different types of professional help:
- Financial adviser — for pensions, investments and financial planning. See our guide: How Can I Check Whether a Financial Adviser Is Regulated?
- Tax professional — for US tax filing, FBAR, FATCA, and UK-US double taxation treaty questions. A cross-border UK-US tax specialist is essential.
- Legal professional — for wills, US estate planning and property legal matters
- Mortgage specialist — for property financing across borders
- FX provider — for GBP/USD currency transfers and managing exchange rate risk
Understanding the total cost of advice is important before you commit to any arrangement.
Link Independent can help identify appropriate professionals from its network based on your circumstances. Find an adviser or use the Expat Planner to get started.
Summary
- Your UK pension remains yours — you do not have to transfer it
- US tax treatment of UK pensions and investments is complex
- FBAR and FATCA reporting requirements may apply to your UK accounts
- UK investment funds may be classified as PFICs by the IRS
- You need an adviser who understands both UK and US rules
- US estate planning and UK inheritance tax interact in complex ways
- Always seek specialist cross-border UK-US tax and financial advice
This guide does not provide personalised tax advice. Always consult a regulated adviser and a qualified cross-border tax professional.