U.S. Taxes for Americans Living in the United Kingdom: The 2026 Guide

Key takeaways

• The saving clause keeps you in the U.S. system. Article 1(4) of the U.S.–UK convention lets the U.S. tax its citizens as if the treaty did not exist. However, the UK treaty carves out an unusually long list of pension and social security provisions from that clause.
• U.S. Social Security received while you live in the UK is taxable only in the UK — even for U.S. citizens. Article 17(3) gives the residence country exclusive taxing rights over social security payments, and Article 1(5)(a) protects that rule from the saving clause.
• Retirement accounts grow tax-deferred across the border. Under Article 18(1), also excepted from the saving clause, the U.S. does not tax income building up inside a UK pension scheme until it is paid out, and the UK should not tax growth inside a 401(k) or IRA. HMRC's treaty summary also states that pension payments exempt in the U.S. (for example, qualified Roth IRA distributions) are exempt in the UK.
• The UK 25% "tax-free" pension lump sum is not tax-free for U.S. purposes. IRS Chief Counsel has indicated that the saving clause allows the U.S. to tax a citizen notwithstanding the lump-sum rule in Article 17(2).
• ISAs are not protected. No treaty provision or IRS guidance located treats an Individual Savings Account as tax-exempt for U.S. purposes. UK-domiciled funds held in an ISA can also be PFICs.
• Totalization: self-employed people follow residence, employees generally follow the workplace. Under the U.S.–UK social security agreement, a self-employed person who resides in the UK is assigned UK coverage (Class 4 NIC), not U.S. self-employment tax.

Who this applies to, and why living in the UK changes nothing on the U.S. side

IRS Publication 54 states that U.S. citizens and resident aliens are generally taxed on worldwide income wherever they live, with the same filing requirements as if they lived in the United States.

The current treaty. The convention was signed in London on July 24, 2001 and amended by a protocol signed July 19, 2002 (Treasury press release PO-3272, which describes the protocol as technical clarifications plus reinstatement of the teachers article). According to HMRC's treaty page, it entered into force on March 31, 2003. In the U.S. it took effect from May 1, 2003 for withholding taxes and January 1, 2004 for other taxes; in the UK, from 6 April 2003 for income tax and capital gains tax. The 1975 convention still appears on the IRS site but has been replaced.

The saving clause — Article 1(4). Notwithstanding any provision except Article 1(5), each country may tax its residents (as determined under Article 4) and, by reason of citizenship, its citizens, as if the convention had not come into effect.

Exceptions available to everyone, including U.S. citizens — Article 1(5)(a):

• Art. 9(2) (correlative adjustments);
• Art. 17(1)(b) (pension amounts exempt in the source country stay exempt in the residence country);
• Art. 17(3) (social security taxable only in the residence country);
• Art. 17(5) (alimony and child support);
• Art. 18(1) (no current taxation of income earned inside a pension scheme of the other country);
• Arts. 24 (relief from double taxation), 25 (non-discrimination) and 26 (mutual agreement).

Exceptions only for non-citizens without permanent residence — Article 1(5)(b): Art. 18(2) (cross-border pension contributions), and Arts. 19, 20 and 28.

Former citizens. Article 1(6) treats a former citizen or long-term resident who gave up status with tax avoidance as a principal purpose as a citizen for saving-clause purposes for 10 years, but only for income from sources in that country.

Treaty residence. Article 4(2) provides that a U.S. citizen or green-card holder is a U.S. resident for treaty purposes only if the person has a substantial presence, permanent home or habitual abode in the U.S. (and is not resident in a third country under that country's UK treaty). Dual residents use the Article 4(4) tie-breaker: permanent home → centre of vital interests → habitual abode → nationality → competent-authority agreement. For citizens, winning the tie-breaker in the UK's favour does not switch off U.S. citizenship-based taxation.

UK residence and the end of "non-dom" status. Residence in the UK is determined under UK domestic rules (the Statutory Residence Test). (The Statutory Residence Test guidance on GOV.UK was not retrieved for this review.) From 6 April 2025 the UK abolished the domicile-based remittance basis. It replaced it with a four-year foreign income and gains (FIG) regime for new arrivals who have not been UK resident in any of the previous 10 tax years. (ACCA technical summary and Tax Adviser magazine; HMRC's own FIG guidance was not retrieved.)

What the U.S.–UK treaty actually says

Taxes covered (Art. 2)

• U.S.: federal income taxes under the Code, excluding social security taxes, plus federal excise taxes on insurance policies issued by foreign insurers and on private foundations.
• UK: income tax, capital gains tax, corporation tax and petroleum revenue tax.

National Insurance contributions are not listed. U.S. state and local taxes are not covered, except that non-discrimination (Art. 25(7)) extends to taxes of every kind.

Main income categories (residents of the UK)

Item	Treaty rule	Article
Dividends	U.S. may withhold up to 15% (5% for companies with ≥10% voting power; 0% for certain 80% parents and for pension schemes)	10
Interest	Taxable only in residence state (with exceptions)	11
Royalties	Taxable only in residence state	12
Gains on real property	May be taxed where the property is situated	13(1)
Other gains	Residence state only, but a country may tax a resident of the other country on gains if that person was resident in the first country at any time in the prior six years	13(5)–(6)
Employment income	Taxable where exercised; 183-day exception (measured over any 12-month period)	14
Pensions and similar remuneration	Taxable only in residence state; amounts that would be exempt in the source country are exempt in the residence country	17(1)
Lump sums from a pension scheme	Taxable only in the country where the scheme is established	17(2)
Social security	Taxable only in the recipient's residence state	17(3)
Annuities	Taxable only in residence state	17(4)
Alimony / child support	Exempt in both countries unless the payer gets tax relief, in which case taxable only in the recipient's residence state	17(5)
Government pensions	Taxable only by the paying government unless the recipient is a resident and national of the other state	19(2)
Other income	Residence state only (not trust/estate income)	22

HMRC's DT19852 summary lists interest and royalties at 0% and portfolio dividends at 15%. It describes "other pensions" as taxable only in the UK for UK residents, with the note that pension remuneration exempt in the U.S. is exempt in the UK. (HMRC's table cites "Article 18" for other pensions; in the treaty text the rule is in Article 17.)

Double tax relief for U.S. citizens resident in the UK — Article 24(6)

1. The UK need not credit U.S. tax on income that is non-U.S.-source under UK law (Art. 24(6)(a)).
2. On U.S.-source income, the UK credits only the U.S. tax that the treaty would allow on a non-citizen UK resident (Art. 24(6)(b)) — for example, 15% on portfolio dividends, zero on interest.
3. The U.S. then credits the UK income tax and capital gains tax remaining after the UK's credit (Art. 24(6)(c)).
4. Re-sourcing. For that U.S. credit only, the income is deemed to arise in the UK to the extent necessary to avoid double taxation (Art. 24(6)(d)).

Six-year gains rule. Article 24(2)(b) deems gains source in the U.S. where they were derived while the individual was a U.S. resident and may be taxed by the UK only because of the six-year rule in Article 13(6).

Remittance-type relief limitation — Article 1(7)

Where income is relieved in one country under the treaty and the other country taxes it only when remitted, relief is limited to the amount actually taxed in the other country. Whether and how this applies to the post-April 2025 FIG regime (an exemption rather than a remittance basis) was not found in the sources reviewed.

Notable features of this treaty

• Saving-clause carve-outs for pensions and social security (Art. 1(5)(a)), as listed above.

• Article 18(1) pension deferral. Where a resident of one country participates in a pension scheme established in the other, income earned by the scheme may be taxed to the individual only when distributed (and not when transferred to another pension scheme). IRS Chief Counsel (INFO 2008-0043) confirmed that the U.S. will not tax income earned by a UK pension scheme until distributed to the U.S. participant.

• Article 18(5) — contributions by U.S. citizens to UK schemes. For a U.S. citizen resident in the UK who works for a UK-resident employer (or a UK permanent establishment) and participates in a UK pension scheme:

  • contributions attributable to that employment are deductible or excludable for U.S. tax, and employer contributions and accruals are not U.S. income;
  • relief applies only to the extent the contributions qualify for UK relief;
  • relief is capped at what the U.S. would allow for a generally corresponding U.S. plan;
  • it requires that the U.S. competent authority has agreed the scheme generally corresponds to a U.S. plan (Art. 18(5)(a)–(d)).

  Article 18(5) is drafted specifically for U.S. citizens, but it is not named in the Article 1(5) exception list. The Technical Explanation's discussion of that interaction was not retrieved. HMRC lists two UK–USA Competent Authority Agreements signed in July 2021 on its treaty page; their content was not reviewed for this guide.

• Article 4(2) "substantial presence" rule for when U.S. citizens and green-card holders count as U.S. treaty residents.

• Six-year capital gains rule (Art. 13(6)).

• Mutual agreement deadline: three years from first notification, or if later six years from the end of the tax year concerned (Art. 26(1)).

(A note on sourcing: the Treasury Technical Explanation of the 2001 convention could not be retrieved during this review (the expected Treasury URL returned an error). Statements in this guide therefore rest on the treaty text, IRS Chief Counsel documents and HMRC's manual.)

FEIE vs. Foreign Tax Credit in the UK

For the general mechanics of each tool, the stacking rule, and worked 2026 examples outside UK-specific rates, see our guide on FEIE vs. Foreign Tax Credit.

The tools

• FEIE (Form 2555): up to $132,900 for 2026 (IRS IR-2025-103; Rev. Proc. 2025-32), for individuals with a foreign tax home who meet the bona fide residence or physical presence test (Pub. 54, ch. 4). Tax on remaining income is computed as if the excluded income were included (Pub. 54, Reminders).
• FTC (Form 1116): credit for UK income tax and capital gains tax (both treated as income taxes, Art. 24(1)), subject to the limitation. No credit for foreign tax on excluded income (Pub. 54). Unused credits carry forward 10 years (IRS CCA 201111009); a one-year carryback also applies. (Carryback stated in a Pub. 54 section heading whose text was not retrieved.)
• National Insurance is outside the treaty's covered taxes (Art. 2). Its U.S. creditability under the Code was not confirmed. (Pub. 514 guidance on foreign social security taxes and totalization agreements not retrieved.)

UK rates for 2026/27 (England, Wales, Northern Ireland)

• Income tax: personal allowance £12,570 (tapered by £1 for every £2 of adjusted net income over £100,000, reaching zero at £125,140). Basic rate 20% to £50,270, higher rate 40% to £125,140, additional rate 45% above (GOV.UK "Income Tax rates and Personal Allowances").
• Scotland has separate bands, from 19% to 48% (HMRC rates and thresholds for employers 2026–27).
• Dividends: £500 allowance, then 10.75% / 35.75% / 39.35% (GOV.UK "Tax on dividends").
• Employee Class 1 NIC: 8% between £12,570 and £50,270, 2% above (HMRC rates and thresholds 2026–27).

Which usually wins

At UK rates, UK income tax on employment income typically equals or exceeds U.S. income tax on the same income. The FTC therefore usually reduces U.S. income tax on UK wages to zero while also generating carryforwards; the FEIE does the same up to the cap but generates nothing. The FTC also keeps you eligible to make IRA contributions on that compensation. (MyExpatTaxes on FEIE and IRA eligibility.)

When the FEIE may be considered: when UK tax is unusually low relative to U.S. tax — for example, low UK tax because of UK pension contributions or other UK reliefs. This should be modelled year by year.

The FIG regime matters most for investment income. For new arrivals under the FIG regime, non-UK investment income (for example, U.S. dividends) may bear no UK tax. With no UK tax, there is no FTC to absorb the U.S. tax on that income.

2026 worked comparison — employee in London

Assumptions (illustrative): single U.S. citizen; salary £85,000; same salary in both UK tax years spanning calendar 2026 (so UK tax can be treated as accruing evenly); exchange rate assumed at $1.30 / £1; no pension contributions or other reliefs. U.S.: standard deduction $16,100 and 2026 brackets (IRS IR-2025-103).

Note that the UK tax year runs 6 April – 5 April while the U.S. year is the calendar year, so in practice UK tax must be apportioned to the U.S. year. (No IRS guidance specific to UK tax-year apportionment was retrieved.)

UK income tax (2026/27 rates):

• Taxable: £85,000 − £12,570 = £72,430
• £37,700 × 20% = £7,540; £34,730 × 40% = £13,892 → £21,432 ≈ $27,862
• Employee NIC: £37,700 × 8% = £3,016 + £34,730 × 2% = £694.60 → £3,710.60 (not part of the FTC computation below)

U.S. income tax:

• Wages: £85,000 × 1.30 = $110,500
• Taxable: $110,500 − $16,100 = $94,400
• Tax: $1,240 + $4,560 + 22% × $44,000 ($9,680) → $15,480

	Option A — FTC	Option B — FEIE
U.S. tax before relief	$15,480	$0 ($110,500 excluded; under cap)
Credit applied	$15,480	n/a
U.S. income tax due	$0	$0
UK tax carried forward	≈ $12,382 (general category)	none

Basic-rate check (salary £40,000): UK tax (£27,430 × 20%) = £5,486 ≈ $7,132. U.S. tax on $52,000 wages: taxable $35,900 → $1,240 + 12% × $23,500 = $4,060. FTC again eliminates U.S. income tax.

Social Security: the U.S.–UK totalization agreement

The agreement's dual-coverage provisions took effect January 1, 1985; the benefit provisions took effect later (SSA POMS GN 01719.001 and RS 02001.355). A supplementary agreement took effect September 1, 1997.

Self-employed. SSA's agreement description assigns coverage by residence:

• self-employed workers who reside in the United States → U.S. coverage;
• self-employed workers who reside in the United Kingdom → UK coverage.

A U.S. citizen self-employed and living in the UK therefore pays Class 4 NIC (6% on profits £12,570–£50,270, 2% above, for 2026/27, per GOV.UK). That person should not pay U.S. SE tax, provided they hold a certificate of coverage. SSA states that self-employed workers should attach a copy of the certificate to their U.S. return every year. Certificates are requested from HMRC (PT Operations North East England), which can be done online via GOV.UK.

Employees. The IRS describes the general rule of totalization agreements: social security taxes are generally paid only in the country where you work, but a worker temporarily sent abroad can generally remain covered only by the U.S. system (Pub. 54, ch. 2). The maximum length of a "detached worker" assignment under the UK agreement was not found in the sources reviewed.

Benefits. The U.S. counts UK credits only if you have at least six U.S. credits and do not already qualify on U.S. credits alone. The UK can count U.S. credits for its basic pension tier if you have at least one year of UK coverage (SSA).

Taxation of benefits:

• U.S. Social Security paid to a UK resident: taxable only in the UK (Art. 17(3), saving-clause exception under Art. 1(5)(a)).
• UK State Pension paid to a U.S. citizen living in the UK: taxed by the UK as residence country; the U.S. may also tax under the saving clause, with FTC relief. (No IRS guidance specific to UK State Pension received by UK-resident citizens was retrieved; analysis based on treaty text, since Art. 17(3) covers only payments to residents of the other country.)

U.S. retirement accounts (401(k), IRA, Roth)

Growth while you live in the UK. Article 18(1) — excepted from the saving clause — provides that a UK resident's income earned inside a pension scheme established in the U.S. may be taxed only when paid out. The treaty defines "pension scheme" (Art. 3(1)(o)) as an arrangement established in a contracting state that is generally exempt from income tax there and operated principally to provide pension or retirement benefits. IRS Chief Counsel documents (INFO 2008-0043; INFO 2010-0151) apply this definition in the UK-scheme context. Whether every U.S. account type meets it was not separately confirmed by HMRC guidance in the sources reviewed.

Distributions:

• Periodic pension distributions to a UK resident are taxable only in the UK under Article 17(1)(a). For a U.S. citizen the U.S. keeps taxing under the saving clause, with Article 24(6) relief.
• Lump sums from a U.S. pension scheme are taxable only in the U.S. (Art. 17(2)), so the UK should not tax them.
• Roth IRA: Article 17(1)(b) — a saving-clause exception — exempts in the residence country any amount that would be exempt in the source country if the recipient lived there. HMRC's treaty summary (DT19852, Note 2) states that pension remuneration exempt in the U.S. is exempt in the UK. HMRC staff answers on HMRC's community forum have said Roth IRA payments not taxable in the U.S. are not taxable in the UK. (HMRC community forum responses are not formal HMRC guidance.)
• Whether new Roth contributions made after becoming UK resident retain that treatment was not found in the sources reviewed.

Rollovers. IRS Chief Counsel memorandum AM 2008-009 concluded that Article 18(1) does not by itself make a transfer from a UK pension scheme into a U.S. IRA or qualified plan a tax-free rollover. INFO 2008-0043 likewise indicates such transfers are treated as distributions unless the Code's rollover rules are met.

UK investments: PFIC risk, ISAs and UK pensions

For the full mechanics of the default §1291 regime, the QEF and mark-to-market elections, and Form 8621 reporting, see our guide on PFICs.

UK funds → PFIC. A foreign corporation is a PFIC if 75% or more of its gross income is passive or at least 50% of its assets produce passive income (Form 8621 instructions). Pub. 54 warns that a non-U.S. mutual fund or ETF may trigger a Form 8621 obligation. Without a QEF or mark-to-market election, §1291 allocates gains and excess distributions over the holding period at the highest rates, plus an interest charge. A UK fund's "reporting fund" status for UK purposes is a UK concept and does not by itself establish a U.S. QEF election. (No IRS guidance equating UK reporting-fund status with QEF status was located.)

Part I of Form 8621 can be skipped for a §1291 fund if total PFIC holdings are $25,000 or less ($50,000 joint) at year-end with no excess distribution or disposition gain (Form 8621 instructions).

ISAs. ISA income is UK-tax-free (GOV.UK "Tax on dividends" confirms no UK tax on dividends from ISA shares). No treaty article or IRS guidance located treats an ISA as exempt for U.S. purposes. An ISA does not appear to be a "pension scheme" under Art. 3(1)(o), because it is not operated principally for retirement benefits. (Analysis based on the treaty definition; no IRS or HMRC confirmation located.) Expect U.S. tax on ISA income and gains with no UK tax to credit. UK funds held in an ISA are also PFIC exposure.

UK workplace pensions and SIPPs:

• Growth: not taxed by the U.S. until distributed (Art. 18(1); IRS INFO 2008-0043). IRS INFO 2010-0151 discusses SIPPs in relation to the Art. 3(1)(o) definition and transfers between UK pension schemes.
• Contributions: U.S. relief only under Art. 18(5) conditions, including U.S. competent-authority agreement for the scheme.
• 25% tax-free lump sum: Article 17(2) gives the scheme's country (the UK) exclusive taxing rights over pension lump sums. Article 17(2) is not a saving-clause exception, and IRS Chief Counsel (AM 2008-009) indicated the saving clause would permit the U.S. to tax a citizen on such a distribution notwithstanding Article 17(2).
• Form 3520/3520-A: the IRS instructions for Form 3520-A (rev. Oct. 2025) reference Rev. Proc. 2020-17, which exempts eligible individuals from Form 3520/3520-A reporting for qualifying tax-favoured foreign retirement trusts. FBAR and Form 8938 obligations are not affected by that exemption. (The detail that FBAR and Form 8938 obligations are unaffected comes from Weaver and KPMG summaries, not a primary source.)
• PFICs inside pensions: a reporting exception exists for PFICs held through an arrangement treated as a foreign pension fund under a U.S. income tax treaty (Treas. Reg. §1.1298-1(c)(4), cited in the Form 8621 instructions). Its application to specific UK schemes was not confirmed.

FBAR, FATCA and banking in the UK

FBAR (FinCEN Form 114): required if aggregate foreign account balances exceed $10,000 at any time in the calendar year. Filed with FinCEN; due April 15 with an automatic extension to October 15 (IRS Form 8938/FBAR comparison; Pub. 54).

Form 8938 (filers living abroad): more than $200,000 at year-end or $300,000 at any time (single/MFS); $400,000 / $600,000 (joint). Penalty up to $10,000, plus up to $50,000 for continued failure after notice (IRS comparison chart).

UK asset	FBAR	Form 8938
UK bank / building society account	Yes	Yes
Stocks & Shares ISA / brokerage account	Yes (account)	Yes (account)
UK funds held directly	Yes	Yes
UK cash-value life insurance / annuity	Yes	Yes
UK real estate held directly	No	No
UK State Pension entitlement	No	No
UK workplace pension / SIPP	Not addressed in the IRS comparison chart	Not addressed in the IRS comparison chart

(Source: IRS "Comparison of Form 8938 and FBAR requirements")

FATCA. The U.S. and UK signed a Model 1 intergovernmental agreement in September 2012, under which UK financial institutions report U.S. persons' accounts to HMRC for transmission to the IRS. (International Tax Review's IGA list; Treasury's FATCA page not retrieved.) Expect UK banks and platforms to request U.S. tax self-certification. Whether UK providers restrict account opening for U.S. persons was not found in the sources reviewed.

U.S. state income tax

The treaty covers only federal income taxes (Art. 2); state taxes are reached only by the non-discrimination article (Art. 25(7)). Whether a former home state can keep taxing you after the move depends on its domicile and residency rules. The decisive question is whether you have clearly abandoned your previous state domicile. See our guide on state taxes after moving abroad for the framework, and check your former state's rules before the first UK year.

Complete 2026 example — employee in Manchester

Profile (illustrative): single U.S. citizen, UK resident throughout 2026, salary £60,000 from a UK employer, joined the employer's UK workplace pension (5% employee / 5% employer, assumed net-pay arrangement). She also holds a Stocks & Shares ISA (£20,000 in a UK-domiciled index fund, £500 of dividends), a pre-move 401(k) and Roth IRA, and a UK current account (peak £15,000). Exchange rate assumed at $1.30 / £1; same salary in both UK tax years spanning 2026.

Step 1 — Social security. Employed in the UK by a UK employer: UK Class 1 NIC applies; no U.S. FICA. Employee NIC: £37,700 × 8% (£3,016) + £9,730 × 2% (£194.60) = £3,210.60.

Step 2 — UK income tax.

• Pension contribution £3,000 (assumed to reduce taxable pay under net pay): £60,000 − £3,000 = £57,000
• Less personal allowance £12,570 → £44,430 taxable
• £37,700 × 20% = £7,540; £6,730 × 40% = £2,692 → £10,232 ≈ $13,302
• ISA dividends: no UK tax.

Step 3 — U.S. wages. This depends on Art. 18(5):

• (a) If Art. 18(5) relief applies (U.S. competent-authority agreement for her scheme assumed): U.S. wages = £57,000 × 1.30 = $74,100; the employer contribution is not U.S. income. (Whether a given UK scheme has the required competent-authority agreement must be confirmed.)
• (b) If it does not apply: the employee contribution ($3,900) is added back, and the employer contribution may also be taxable under domestic law. (Domestic-law treatment of employer contributions to a non-qualified foreign plan not confirmed in sources reviewed.)

Step 4 — U.S. income tax, scenario (a), with FTC.

• Taxable: $74,100 − $16,100 = $58,000 (before ISA income)
• Tax on wages: $1,240 + $4,560 + 22% × $7,600 ($1,672) = $7,472
• FTC (general category): UK tax $13,302 → U.S. tax on wages $0; ≈ $5,830 carried forward

Step 5 — ISA income and PFIC.

• ISA dividends £500 ≈ $650 are U.S.-taxable; there is no UK tax to credit.
• Taxed at her 22% marginal rate ≈ $143. (Assumes the distribution is a non-excess distribution taxed as an ordinary (non-qualified) dividend.)
• Her ISA fund (£20,000 ≈ $26,000) exceeds the $25,000 Part I exception, so Form 8621 Part I is required for that fund.

Step 6 — 401(k) and Roth IRA. No distributions; growth is not taxed in the UK (Art. 18(1)) and not currently taxed in the U.S. under the Code.

Step 7 — Information returns.

• FBAR: yes (UK current account plus ISA ≈ $45,500 > $10,000; pension reportability per adviser).
• Form 8938: no (below $200,000 / $300,000 for filers abroad).
• Form 8621: one, for the ISA fund.
• Form 3520/3520-A for the UK pension: potentially exempt under Rev. Proc. 2020-17 if the scheme qualifies.

Result (scenario a): about $143 U.S. tax (ISA dividends only), about £13,443 to the UK (income tax plus employee NIC), and a $5,830 FTC carryforward. U.S. filing deadline: automatic extension to June 15, 2027 for taxpayers abroad, with interest from April 15 (Pub. 54).

Common mistakes Americans make after moving to the UK

1. Treating the ISA as tax-free for U.S. purposes, and filling it with UK funds (PFIC exposure plus Form 8621).
2. Taking the UK 25% pension lump sum without planning for U.S. tax on it.
3. Paying U.S. tax on U.S. Social Security after becoming UK resident, despite Art. 17(3).
4. Self-employed Americans paying U.S. SE tax instead of UK Class 4 NIC (or both), without a certificate of coverage.
5. Ignoring the UK tax year (6 April – 5 April) when matching UK tax to the U.S. calendar year for the FTC.
6. Assuming UK pension contributions are automatically deductible on the U.S. return. Art. 18(5) has specific conditions, including U.S. competent-authority agreement.
7. Attempting to "roll over" a UK pension into an IRA — IRS Chief Counsel indicates the treaty does not make this tax-free.
8. Defaulting to the FEIE when the FTC would eliminate U.S. tax and build carryforwards.
9. Missing FBAR because each account is small; the $10,000 threshold is aggregate.

Frequently asked questions

Does moving to the UK end my U.S. tax filing?

No. Article 1(4) of the U.S.–UK convention lets the U.S. tax citizens as if the treaty were not in effect, and Pub. 54 confirms worldwide taxation of citizens living abroad.

Will the U.S. tax my Social Security if I retire in the UK?

Under Article 17(3), social security paid to a UK resident is taxable only in the UK, and Article 1(5)(a) applies this even to U.S. citizens.

Is my Roth IRA tax-free in the UK?

Article 17(1)(b) exempts in the UK amounts that would be exempt in the U.S., and HMRC's DT19852 summary states that pension remuneration exempt in the U.S. is exempt in the UK. Whether post-move Roth contributions keep that treatment was not found in the sources reviewed.

Is the UK 25% tax-free pension lump sum tax-free for the IRS?

Not necessarily. IRS Chief Counsel memorandum AM 2008-009 indicates the saving clause permits the U.S. to tax a citizen notwithstanding Article 17(2).

Is my ISA tax-free for U.S. purposes?

No treaty provision or IRS guidance located says so. ISA income is UK-exempt (GOV.UK), so there is generally no UK tax to credit, and UK funds inside it may be PFICs (Form 8621 instructions).

I'm self-employed in London. Do I pay U.S. self-employment tax?

Under the totalization agreement, self-employed workers residing in the UK are assigned UK coverage (SSA). Obtain a certificate of coverage from HMRC and attach it to your U.S. return each year.

When to hire a professional

Get advice from a U.S. preparer experienced with Forms 1116, 8621 and 8938 and a UK adviser if you:

• are drawing, or plan to draw, a UK pension lump sum or transfer a UK pension;
• contribute to a UK workplace pension and want Art. 18(5) relief on your U.S. return;
• hold ISAs, UK funds or investment trusts;
• are in your first four UK tax years and may claim the FIG regime, or have pre-April 2025 remittance-basis history;
• are self-employed, or on a secondment from a U.S. employer;
• are a green-card holder considering a treaty-residence position;
• are leaving the UK within six years of arrival or departure (Art. 13(6));
• have unfiled FBARs or returns (see our guide on Streamlined Filing Compliance Procedures if that applies to you), or face taxation you believe conflicts with the treaty (MAP deadlines in Art. 26(1)).

Sources

Source	URL	Used for	Date of page
U.S.–UK Convention (2001), U.S. Treasury	https://home.treasury.gov/system/files/131/Treaty-UK-7-24-2001.pdf	All treaty articles cited	Signed July 24, 2001
HMRC — USA: tax treaties	https://www.gov.uk/government/publications/usa-tax-treaties	Entry into force, effective dates, 2002 protocol, 2021 CAAs listed	Last updated Aug. 9, 2021
Treasury press release PO-3272	https://home.treasury.gov/news/press-releases/po3272	2002 protocol signature and scope	July 19, 2002
U.S.–UK 1975 convention (IRS)	https://www.irs.gov/pub/irs-trty/uk.pdf	Background only (superseded)	1975
HMRC DT19852 — USA treaty summary	https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt19852	Treaty rates; pension exemption note	Updated Aug. 4, 2026
IRS Chief Counsel INFO 2008-0043	https://www.stayexempt.irs.gov/pub/irs-wd/08-0043.pdf	Art. 18(1) deferral; UK-to-IRA transfers	Sept. 26, 2008
IRS Chief Counsel INFO 2010-0151	https://www.irs.gov/pub/irs-wd/10-0151.pdf	SIPPs and the "pension scheme" definition	2010
IRS Chief Counsel AM 2008-009	https://www.irs.gov/pub/irs-counsel/am2008009.pdf	UK pension rollovers; saving clause vs Art. 17(2)	2008
IRS IR-2025-103	https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill	2026 FEIE, standard deduction, brackets	Oct. 9, 2025
IRS Publication 54 (12/2025)	https://www.irs.gov/publications/p54	Worldwide taxation, extensions, FBAR, 8621, totalization, FEIE rules	Revised Dec. 2025
IRS — Form 8938 vs FBAR comparison	https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements	Thresholds, deadlines, asset table	Last reviewed Sept. 19, 2026
IRS — Instructions for Form 8621	https://www.irs.gov/instructions/i8621	PFIC rules, $25,000 exception, pension-fund exception reference	Last reviewed Apr. 30, 2026
IRS — Instructions for Form 3520-A	https://www.eitc.irs.gov/pub/irs-prior/i3520a--2025.pdf	Reference to Rev. Proc. 2020-17 exemption	Rev. Oct. 8, 2025
IRS CCA 201111009	https://www.eitc.irs.gov/pub/irs-wd/1111009.pdf	10-year FTC carryforward	Mar. 18, 2011
SSA — Totalization Agreement with the UK	https://www.ssa.gov/international/Agreement_Pamphlets/uk.html	Self-employed coverage, certificates, benefits	Certified Nov. 25, 2019
SSA POMS GN 01719.001; RS 02001.355	https://secure.ssa.gov/POMS.NSF/lnx/0201719001	Effective dates	Jan. 12, 2023; Oct. 21, 1996
GOV.UK — Income Tax rates and Personal Allowances	https://www.gov.uk/income-tax-rates	2026/27 bands, allowance taper	Current year 2026/27
GOV.UK — Tax on dividends	https://www.gov.uk/tax-on-dividends	2026/27 dividend rates, ISA dividends	Rates for 2026/27
HMRC — Rates and thresholds for employers 2026 to 2027	https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027	Class 1 NIC, Scottish bands	Updated Sept. 1, 2026
GOV.UK — Self-employed National Insurance rates	https://www.gov.uk/self-employed-national-insurance-rates	Class 4 NIC 2026/27	Not displayed
Secondary — ACCA; Tax Adviser magazine	https://www.accaglobal.com/gb/en/technical-activities/technical-resources-search/2024/October/Non-dom-tax-regime-abolished.html	FIG regime	Oct. 2024
Secondary — HMRC community forum	https://community.hmrc.gov.uk/customerforums/sa/2827b296-f5fb-ee11-a81c-6045bd0df7b9	Roth IRA UK treatment (staff answer)	Apr. 2024
Secondary — International Tax Review	https://internationaltaxreview.com/article/b1f9jv2rxzs2wm/us-updates-fatca-list-of-intergovernmental-agreements	FATCA IGA date	2014
Secondary — Weaver; KPMG	https://weaver.com/?p=4292	Rev. Proc. 2020-17 scope	2020
Secondary — MyExpatTaxes	https://www.myexpattaxes.com/expat-tax-tips/foreign-earned-income/all-about-foreign-earned-income-exclusion-us-expats/	FEIE and IRA eligibility	Sept. 18, 2025

A note on scope: this guide is general information, not tax or legal advice. Which treaty provisions and elections apply to you, how the saving clause and Article 24(6) interact in your case, and how the UK treats your specific accounts and pension all depend on your own facts. Get advice from a US preparer experienced with Forms 1116, 8621 and 8938 and a UK adviser before you rely on anything in this guide.