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The UK continues to be an increasingly attractive destination for US individuals—whether for lifestyle reasons, investment opportunities, education, or proximity to Europe. Over recent years, we have seen a clear rise in interest from US clients wishing to spend more time in the UK, acquire UK property, or establish deeper personal and commercial ties. For many high‑net‑worth Americans, however, the cost of expatriation from the US tax system, combined with the desire to retain US‑based assets and connections, means that they remain fully US taxable even after moving to the UK.
With the introduction of the UK’s new Foreign Income and Gains (FIG) regime, effective 6 April 2025, there are now compelling planning opportunities for Americans considering UK residence. This regime represents one of the most significant changes to the UK’s private client tax landscape in decades, replacing the long‑standing remittance basis of taxation.
Understanding the FIG regime: a new opportunity for globally mobile US clients
The four year FIG regime allows qualifying new UK residents to avoid UK tax on their non UK income and gains, with the added advantage that these funds may be brought into the UK without triggering a UK tax charge, a substantial simplification when compared to the historical remittance basis.
To qualify, an individual must:
- Become UK tax‑resident, and
- Have been non‑UK tax resident for at least the previous 10 consecutive tax years.
For US clients, this creates a valuable planning window: US individuals will continue to file and pay US tax on their worldwide income, but the UK will effectively ignore foreign income and gains for the first four years of UK residence, significantly reducing exposure to double taxation and simplifying cross border financial planning.
US clients wanting to retain US ties
Because renouncing US citizenship can be costly and, in many cases, undesirable due to family, business and investment ties in the United States, many American clients choose to remain fully US taxable. Unlike many jurisdictions, the FIG regime is well suited to this reality.
By allowing US individuals to use their non‑UK income and gains freely in the UK without a UK tax charge, the FIG regime reduces the friction traditionally associated with being a US person living abroad.
Managing UK tax residence: how much time can US clients spend in the UK?
Our team advises clients on the Statutory Residence Test (SRT), determining exactly how many days they can spend in the UK before becoming UK‑resident for tax purposes. This threshold varies depending on a number of different tests. One of these tests looks at individual connections such as a UK home, family ties, and work commitments. The SRT can be difficult to navigate without professional advice, so we help provide clients with certainty over how much time they can spend here without triggering further tax.
For clients seeking flexibility, we assist in modelling different residence scenarios to optimise the period during which the FIG regime can apply, ensuring they enter UK tax residence at a time that maximises their four‑year tax‑free window.
Beyond the FIG regime: leveraging the UK–US income tax treaty
While the FIG regime offers exceptional benefits for the first four years, many US clients wish to stay in the UK for longer. This is where the UK–US income tax treaty becomes especially powerful.
Even after the FIG period ends, individuals who retain a home, family, and economic connections in the US may be able to rely on treaty tie‑breaker rules to preserve US tax residence for an extended period. This can simplify their UK filing obligations and, in some cases, limit their UK tax exposure far beyond the initial four‑year FIG window.
The post‑2025 UK tax reforms, particularly the shift to residence‑based IHT and income tax rules, highlight even more reasons to use treaty planning proactively. This is also relevant to internationally mobile employees who work across jurisdictions.
Estate planning opportunities under the UK–US estate tax treaty
A major area of concern for US clients relocating to the UK is the risk of exposure to UK Inheritance Tax (IHT) on worldwide assets. Under the new UK rules, long‑term residents may become subject to UK IHT on a global basis. Unlike the generous US lifetime exemptions, the UK’s nil rate band threshold for IHT is comparatively very low (at £325,000 per individual).
However, the UK–US estate tax treaty provides critical protections:
- US citizens can often remain taxable only on UK‑situated assets, even after long periods in the UK.
- Proper structuring of assets—particularly US situs assets, can ensure continued protection from UK IHT.
These measures are especially valuable given the new UK “long‑term resident” rules, which create a ten‑year IHT tail even after departure from the UK.
It should be noted that trusts are drafted and treated differently in the UK and the US, and so domestic US trusts always need to be reviewed by UK qualified advisors to prevent unintended UK tax consequences.
Why the UK is more attractive than ever for US individuals
Combining the new FIG regime, the UK–US income tax treaty, and the estate tax treaty, the UK now offers one of the most flexible and favourable environments for US clients seeking to spend time in, invest in, or relocate to.
Our team specialises in advising internationally mobile US individuals and families on:
- UK tax residence and day‑count planning
- FIG regime eligibility and optimisation
- Cross‑border income tax coordination
- UK–US treaty planning for income, capital gains, and estate taxes
- Structuring trusts and investments for US taxpayers in a UK context
- Long‑term planning beyond the FIG regime and eventual exit planning
Whether clients ultimately settle in the UK or maintain a dual‑country lifestyle, the combination of new UK rules and longstanding treaty protections offers unprecedented planning opportunities.