Moving to UK Tax Guide 2026: US Tax Obligations, UK SRT, and the New FIG Regime

The United Kingdom is one of the most significant moves an American can make — whether for work, family, or lifestyle. The US and UK have one of the most sophisticated bilateral tax relationships of any two countries, with a comprehensive 2001 tax treaty, a Totalization Agreement, and strong information-sharing infrastructure. But for Americans, the UK also means navigating one of the world’s most complex residence tests and, since April 2025, adapting to a completely redesigned foreign income regime that replaced the long-standing non-domicile system.

This guide covers the UK Statutory Residence Test (SRT), the new Foreign Income and Gains (FIG) regime that launched April 2025, the US-UK tax treaty and its Article 24 double-tax relief, National Insurance, pension planning, and FBAR obligations for all UK financial accounts.

UK Statutory Residence Test: How Americans Become UK Tax Residents

The UK Statutory Residence Test (SRT), introduced in 2013, replaced the old common law residency rules. It is considerably more complex than a simple 183-day rule, though 183 days is still a bright-line automatic trigger. Understanding your status under the SRT in your year of arrival is essential — most Americans benefit from professional advice for the arrival year.

Automatic Overseas Test (Non-Resident)

You are automatically NOT a UK tax resident if you meet any of these: (1) fewer than 16 days in the UK in the tax year (or fewer than 46 days if you were not UK resident in any of the previous 3 tax years); (2) you work full-time overseas with fewer than 91 days in the UK and fewer than 31 UK workdays (days with 3+ hours of work). If you meet the Automatic Overseas Test, no further analysis is needed — you are non-resident. Note: UK tax year runs April 6 to April 5.

Automatic Residence Test (Resident)

You are automatically a UK tax resident if: (1) 183+ days in the UK in the tax year — this is the most common trigger for Americans who move to the UK; (2) you have a home in the UK for at least 91 consecutive days (30+ of them in the tax year) and are present there on at least 30 days in the tax year; (3) you work full-time in the UK for any 365-day period, with more than 75% of your working days in the UK. If you meet any Automatic Residence condition, you are UK resident regardless of other factors.

Sufficient Ties Test

If you fall between the automatic tests (more than 16 days but under 183), you must count your UK “ties”: accommodation tie (have accessible accommodation in UK that you use); family tie (spouse/civil partner or minor child resident in UK); work tie (working 40+ days in the UK); 90-day tie (spent 90+ days in UK in either of the previous 2 tax years). A country tie (the UK is where you spent the most days in the tax year) applies only to people who were UK resident in at least one of the previous 3 tax years. The number of ties combined with number of UK days determines residency. For example: if you spent 120 days in the UK and have 3 ties — you are UK resident. This analysis requires a careful diary of UK days and tie status. Year of arrival split-year treatment is available — allowing you to be non-resident for the part of the year before you arrive.

The New FIG Regime: April 2025 Non-Dom Replacement

The April 2025 FIG (Foreign Income and Gains) regime is the most significant change to UK international tax in decades. It replaced the previous non-domicile remittance basis system, which had allowed long-term UK residents to shelter foreign income from UK tax if they didn’t bring it into the UK. The non-dom system was abolished with effect from April 6, 2025.

What the FIG Regime Offers

The FIG regime provides: in your first 4 tax years of UK tax residency (provided you were not UK tax resident in any of the previous 10 tax years), you can elect to pay 0% UK income tax and 0% capital gains tax on foreign income and foreign capital gains. The election is made on the UK self-assessment tax return for each year. You do not need to keep foreign income or gains offshore — unlike the old remittance basis, you can bring money to the UK freely without triggering tax. This is a substantial improvement over the old system for new arrivals.

What This Means for Americans

For Americans arriving in the UK from April 2025 with no UK residency in the prior 10 years: during the first 4 years of UK residency, you elect into FIG. Your US-source income (dividends, interest, capital gains, US pension distributions, rental income from US property) is 0% taxable in the UK during those 4 years. Your UK-source employment income is still taxable in the UK normally. After 4 years: you become fully UK-taxable on worldwide income — UK transition rules apply. The FIG regime essentially gives new arrivals a 4-year grace period to restructure their affairs — a major planning opportunity for high-net-worth Americans with significant US investment portfolios relocating to the UK. Work with a UK tax advisor in the year you arrive to ensure you make the FIG election correctly on your first UK self-assessment return.

Interaction with US Tax Obligations

The FIG regime does not affect your US tax obligations. You still owe US tax on all worldwide income as a US citizen. The FIG regime reduces your UK tax bill (potentially to zero on foreign income for 4 years), which means less UK tax to credit against your US liability via the Foreign Tax Credit. For some Americans in the FIG period, the US may actually collect more tax (because there is less UK tax to credit), even though UK tax is zero. Run a full calculation with your expat CPA — the interaction is non-trivial.

US-UK Tax Treaty and Dual Filing Obligations

The US-UK Tax Treaty (2001)

The US-UK income tax treaty of 2001 is one of the most comprehensive US bilateral treaties. Key provisions: employment income taxed in country of work; business profits taxed based on permanent establishment; dividends: 15% withholding (5% for 10%+ corporate shareholders); interest: 0% withholding; royalties: 0%; pensions (critical for Americans): under Article 17(1), periodic pension payments are generally taxable only in the country of residence (the UK, for UK residents), while Article 17(2) makes a lump-sum payment from a pension scheme taxable only in the country where the scheme is established; the Savings Clause still lets the US tax a US citizen, with double taxation relieved through credits; capital gains: generally taxed in country of residence. The Savings Clause means the US reserves the right to tax its citizens as if the treaty did not exist, which limits pure treaty-shopping. However, the treaty’s mechanism for preventing actual double taxation is strong.

Article 24(6): Re-Sourcing Rule for US Citizens in the UK

Article 24(6) of the US-UK treaty applies when the US taxes a US citizen who is resident in the UK under the Savings Clause. The UK gives credit only for the US tax the US could impose on a UK resident who is not a US citizen (on US-source income), and the US then allows a credit for UK tax paid, treating the income as UK-source to the extent needed to avoid double taxation. This is sometimes called the treaty’s ‘super-credit’. In practice UK tax on US-source income can generally be credited against US tax, but this does not guarantee that no additional US tax is due; have both countries’ tax modelled by a dual-qualified adviser.

401k and IRA Treatment

Americans with US 401k or IRA accounts moving to the UK face complex questions: UK pension contributions (employer or personal into a SIPP) are generally deductible in the UK. US 401k contributions made while working in the UK — a UK employer may contribute to a 401k equivalent if they have US payroll, but this is less common than SIPP contributions. Taking US IRA or 401k distributions while a UK resident: under Article 17 of the treaty, periodic pension payments are generally taxable in the UK as the country of residence, a lump-sum payment from a US pension scheme is taxable only in the US, and the US also keeps its right to tax a US citizen under the Savings Clause. UK pension distributions (SIPP) for a UK resident are generally taxable in the UK. Keep meticulous records of all contributions and their tax treatment in both countries to ensure correct treaty treatment.

Practical Arrival Steps: NI Number, HMRC Registration, FBAR

National Insurance (NI) Number

A National Insurance (NI) number is the UK equivalent of a Social Security Number — required to work, access benefits, and file tax returns. Apply online through the UK government website (gov.uk). Processing can take several weeks. Americans working in the UK on a visa should apply for their NI number immediately upon arrival. National Insurance contributions: employees pay 8% on earnings between £12,570 and £50,270 and 2% above (reduced from 12% in April 2024). Employers pay 15% on earnings above £5,000/year (secondary threshold — increased from 13.8%/£9,100 from April 2025). Under the US-UK Totalization Agreement, Americans on short-term assignments (typically up to 5 years) with a US Certificate of Coverage continue contributing to US Social Security and are exempt from UK National Insurance. Those on longer-term or permanent moves without a Certificate of Coverage pay into UK National Insurance.

HMRC Registration and UK Self-Assessment

Register for UK self-assessment at HMRC (His Majesty’s Revenue and Customs) once you establish UK residency. Self-assessment is required if you have: income from self-employment; rental income; foreign income (even if claiming FIG relief, you must still file to make the election); income above £100,000 (personal allowance phase-out); certain investment income. UK tax return (Self-Assessment) deadline: October 31 for paper returns; January 31 for online returns (for the April 5 year-end). Working with a UK chartered accountant (CA) or US/UK dual-qualified tax advisor is strongly recommended, especially in the year of arrival when split-year treatment and FIG elections are at stake.

FBAR for UK Accounts

All UK bank and financial accounts (Barclays, HSBC, Lloyds, NatWest, Santander UK, Monzo, Starling, etc.) must be reported on FinCEN Form 114 (FBAR) annually if aggregate value exceeds $10,000 at any point. Also report UK ISA (Individual Savings Account) accounts, UK investment accounts, and UK pension accounts (SIPP) if they constitute foreign financial accounts above the threshold. FBAR is due April 15 (automatically extended to October 15) via FinCEN’s BSA E-Filing System. FATCA Form 8938 also applies if foreign financial assets exceed $200,000 at year-end/$300,000 at any point (single filers abroad). UK financial institutions report US account holders to HMRC under FATCA — non-compliance is easily detected.