Introduction
Living in the United Kingdom as an American citizen comes with unique financial responsibilities. You need a US tax advisor for expats in the UK who knows the freshly reformed UK tax regime, U.S. filing rules, and the treaty provisions that protect you from double taxation. As of April 2025, several significant changes—such as the end of the non-dom regime and new Foreign Income & Gains (FIG) rules—transform how U.S. expats pay UK taxes. JungleTax helps expats like you understand those changes, file both U.S. and UK obligations correctly, and legally minimise your tax burden.
What’s New in UK Tax Rules for Expats (2025)
To make informed decisions, you must understand the new UK-side rules that impact U.S. citizens living in the UK.
- Abolition of the Non-Dom Regime & Introduction of the FIG Regime
The UK abolished the long-standing “non-domiciled” (non-dom) tax system on April 6, 2025. Instead, when they move to the UK, they can be eligible for the Foreign Income & Gains (FIG) relief. KLR+2Greenback Expat Tax Services+2- If you were non-resident for the prior 10 years before arriving in the UK, you may get up to 4 years’ complete relief on foreign income and gains under the FIG. After this period, you’ll be taxed in the UK on worldwide income and gains as they arise. Creative Planning+1
- The FIG relief applies even if you don’t remit (bring) foreign income into the UK. Creative Planning+1
- If you were non-resident for the prior 10 years before arriving in the UK, you may get up to 4 years’ complete relief on foreign income and gains under the FIG. After this period, you’ll be taxed in the UK on worldwide income and gains as they arise. Creative Planning+1
- Residency and Statutory Residence Test (SRT)
You become a UK resident if you meet the UK’s Statutory Residence Test, which considers days spent in the UK, your ties (home, work, family), and where your main home is located. Taxes for Expats+2Greenback Expat Tax Services+2 - UK Tax on Worldwide Income & Gains
Once FIG relief ends (or if you do not qualify), the UK will tax you on all income and gains worldwide as they arise, regardless of whether you bring them into the UK. Greenback Expat Tax Services+1 - Personal Allowances, Capital Gains & Inheritance Tax (IHT)
- The UK’s personal allowances and capital gains exemptions continue, but you should check how they interact with your other income sources.
- Inheritance tax has shifted toward a residence-based system rather than a purely domicile-based system. Long-term residents may find their worldwide assets subject to IHT once they pass certain thresholds of UK residence. Creative Planning
- Digital Reporting & Deadlines
- From April 2026, individuals earning more than £50,000 in self-employment or rental income will need to report via Making Tax Digital (quarterly digital returns). Greenback Expat Tax Services
- The K tax year still runs from 6 April to 5 April. Key deadlines (for self-assessment, registering, and paying on account) remain essential to avoid penalties. Universal Tax Professionals+1
- From April 2026, individuals earning more than £50,000 in self-employment or rental income will need to report via Making Tax Digital (quarterly digital returns). Greenback Expat Tax Services
U.S. Tax Obligations for Expats
Even while living in the UK, U.S. citizens and green card holders must still comply with U.S. tax laws. Here’s what your U.S. obligations include:
- Filing Requirement (Form 1040 & related forms)
You must file U.S. income tax returns reporting your worldwide income, even if you pay UK tax. You may need to file extra forms such as Form 2555 (Foreign Earned Income Exclusion), Form 1116 (Foreign Tax Credit), etc. - Foreign Earned Income Exclusion (FEIE)
For the 2025 tax year, you may exclude up to $130,000 of foreign earned income if you qualify under either the Physical Presence Test or Bona Fide Residence Test. Greenback Expat Tax Services+1 - Foreign Tax Credit (FTC)
You can offset U.S. income tax by the amount of tax you paid to HMRC on the same income. If UK tax rates are high, this often reduces U.S. tax liability to zero or nearly zero. - FBAR & FATCA / Foreign Asset Reporting
Report foreign bank accounts (FBAR, FinCEN Form 114) if aggregate balances exceed $10,000 at any time during the year. Also, report foreign assets on forms like FATCA, depending on the applicable thresholds. - Use of Treaty Provisions
The U.S.–UK tax treaty helps clarify which country can tax what, avoids double taxation, and may reduce or eliminate some withholding on pensions, dividends, etc.
How a US Tax Advisor for Expats in the UK (Like JungleTax) Helps
When you work with a specialist tax advisory service, you gain these advantages:
- They assess whether you qualify for FIG relief, when it expires, and plan accordingly.
- They calculate entitlements under FEIE, FTC, and ensure you file the required forms (U.S. & UK) on time.
- They manage compliance obligations like FBAR, FATCA, and UK self-assessment returns.
- They factor in new rules (making tax digital, new inheritance tax rules) into your tax planning.
- They help with cross-border investments, pension transfers, business income, and estate planning.
JungleTax draws on up-to-date UK and U.S. tax law, so you avoid unexpected tax costs, interest, and penalties.
Key Tax Planning Strategies for 2025-2026
You can save significantly, and a good tax advisor will leverage these strategies:
- Time Your Arrival or Departure in the UK Carefully
If you plan to become a UK resident, consider when you arrive relative to the tax year. Early timing may allow maximum benefit of FIG relief. - Use FIG Relief Fully (if eligible)
For your first four UK residency years (for those qualifying under new rules), FIG may shield you from UK tax on foreign income/gains. Plan foreign income and gains around that period. - Maximise U.S. Protections
Claim FEIE, FTC, and file any required IRS forms timely. US expats often end up owing $0 in tax once these protections apply. Greenback Expat Tax Services - Plan for Inheritance Tax & Residency-Based IHT
The UK’s IHT rules now depend more on the length of residence. If you stay long term (10+ years), your worldwide assets may be subject to IHT. Don’t ignore wills, estate planning, domicile/deemed domicile status. - Self-Employment / Rental Income
If you have rental income in the UK or business income, ensure you understand UK tax, national insurance, and U.S. reporting. Additionally, digital reporting rules are coming into effect; therefore, it is essential to maintain accurate records. - Stay Current with Deadlines
- UK Self Assessment registration: by 5 October for those who need it.
- UK tax return online: by 31 January following the tax year.
- U.S. tax deadlines: Typically April 15; expats often have an automatic extension to June 15, but interest may accrue.
- Keep Good Records
Maintain documentation for foreign income, gains, tax paid in the UK, dates of residency/test, bank statements for FBAR / FATCA, etc.
Common Pain Points & Mistakes to Avoid
Even with good planning, many expats fall into traps. A skilled US tax advisor for expats in the UK can help you avoid:
- Claiming non-dom rules when you no longer qualify (past April 2025)
- Missing deadlines for registration or filing in either country
- Underestimating UK or U.S. income (forgetting passive income, capital gains, foreign bank interest)
- Neglecting foreign asset reporting obligations: FBAR, Form 8938, etc.
- Failing to consider currency conversion rules or foreign exchange gains/losses
Example Case Studies
To see how this works in practice, here are hypothetical but realistic scenarios:
- Lisa, a software engineer from California
She moved to London in September 2024 and met the non-resident test requirement before entering the UK. From 6 April 2025, she will begin her UK residency. She qualifies for FIG relief. JungleTax helps her claim zero UK tax on her U.S.-derived investment income in her first four UK tax years. On the U.S. side, she uses FEIE and FTC, and ends up owing minimal or no U.S. tax after crediting her UK taxes. - David, a retired military veteran, is now living in Manchester.
Hearns a UK pension, some U.S.-source retirement income, and has U.S. investment dividends. He failed to file FBAR for some years. JungleTax helps him catch up via streamlined procedures, calculates FEIE, and ensures his U.S. reporting is compliant.
Final Thoughts
You deserve clarity, confidence, and savings. Choosing a reliable US tax advisor for expats in the UK puts you in control. Laws have changed significantly in 2025—non-dom abolished, FIG regime introduced, inheritance & estate laws shifting. By partnering with an experienced service like JungleTax, you ensure full compliance, take advantage of all reliefs, and avoid costly mistakes.
If you want expert help tailored to your exact circumstances, you’re just a call or click away.
FAQs
If you qualify under FIG relief during your first four years of UK residency (and were non-resident for 10 years preceding), then the UK does not tax foreign income until that relief ends. After that, the UK taxes global income and gains as they arise.
Use the Foreign Tax Credit in the U.S. and treaty provisions. Claim FEIE in the U.S. if eligible. Plan your UK status to maximise available reliefs.
IRS offers streamlined filing compliance procedures for expats to file past returns with reduced penalties if non-compliance wasn’t willful.
Costs vary depending on the complexity of your situation. But proper tax planning often saves more than it costs by avoiding penalties and overtaxation.
Then, you especially need long-term planning for IHT, residence status, and capital gains impact. Understand when FIG ends, when global tax becomes entirely relevant, and estate planning becomes critical.