UK taxes for Americans: fitting with your US return

Here's the deal: once you're UK resident, HMRC taxes you like a local, and because you're American, the IRS still taxes you too. The good news is that UK rates are high enough that most Londoners on a salary owe little or nothing extra to Uncle Sam.

The short version

UK residence is set by the statutory residence test: 183 days in a tax year makes you resident automatically, and so can having your only home in the UK [1].
The UK tax year runs April 6 to April 5. The US tax year is the calendar year. That mismatch causes most of the headaches.
The remittance basis for non-doms ended on April 6, 2025. It was replaced by a 4-year foreign income and gains (FIG) regime for people arriving after 10 years of non-UK residence [2].
The US–UK tax treaty (in force since 2003) and the foreign tax credit keep you from paying full tax twice, but the treaty's saving clause means the US still taxes its citizens [6].
The US–UK totalization agreement (in force since January 1, 1985) generally stops you paying Social Security and National Insurance on the same wages [7].

USD conversions use the Federal Reserve H.10 rate of October 30, 2026 (£1 = $1.3398), rounded.

Are you UK resident?

The UK doesn't use citizenship or a green-card-style test. It uses the statutory residence test (SRT), applied each UK tax year [1]:

Test	Result
You spent 183 days or more in the UK in the tax year	Automatically UK resident [1]
Your only home was in the UK for 91 days or more in a row	Automatically UK resident [1]
You spent fewer than 16 days in the UK	Automatically non-resident [1]
You worked abroad full time (averaging at least 35 hours a week)	Automatically non-resident, subject to conditions [1]
None of the above	Sufficient ties test: days in the UK plus ties such as work or family [1]

If you move to London partway through a UK tax year, split-year treatment usually divides the year into a non-resident part and a resident part, so you're only taxed as a resident from the move [1].

For most Americans relocating for a job, it's simple: you'll be UK resident from the year you arrive.

How the UK taxes you

UK residents pay income tax on their worldwide income. For 2026–27 (April 6, 2026 to April 5, 2027), the rates outside Scotland are [3]:

Band	Taxable income	Rate
Personal allowance	Up to £12,570 (about $16,840)	0%
Basic rate	£12,571 to £50,270 (about $67,350)	20%
Higher rate	£50,271 to £125,140 (about $167,660)	40%
Additional rate	Over £125,140	45%

The personal allowance shrinks by £1 for every £2 over £100,000 (about $134,000) and is gone at £125,140 [3]. Scotland has its own bands.

On top of that, employees pay National Insurance: 8% on earnings between £242 and £967 a week (about $1,400 to $5,610 a month), and 2% above that, in 2026–27 [4].

Most employees pay through PAYE, so the tax comes out of your paycheck and you may never file a UK return. You'll need a Self Assessment return if you have untaxed income, such as US investment income, rental income from a home back in the States, or self-employment income, or if you claim the FIG regime. Key dates for the 2025–26 tax year [5]:

October 5, 2026: tell HMRC if you need to file and haven't before
October 31, 2026: paper return deadline
January 31, 2027: online return deadline and payment of tax owed

The end of the remittance basis and the new FIG regime

For years, "non-doms" in London could pay UK tax only on foreign income they brought into the UK. That remittance basis was replaced on April 6, 2025 by the 4-year foreign income and gains (FIG) regime [2].

How FIG works [2]:

You must be UK resident and within your first 4 tax years of UK residence, after at least 10 years of non-UK residence.
You can claim relief on foreign income and gains for up to 4 consecutive years. Unused years can't be carried forward.
You claim on your Self Assessment return, and you can choose which foreign income and gains to claim on.
Foreign employment income doesn't qualify. You may be able to use Overseas Workday Relief for pay for work done outside the UK instead.
Claiming costs you your tax-free allowances for income tax and capital gains tax, and the foreign income still counts for things like the High Income Child Benefit Charge.

Why FIG is trickier for Americans

For a Brit or a Canadian, FIG can mean four years of no UK tax on foreign investment income. For an American, there's a catch: the IRS taxes that same income regardless. If the UK doesn't tax your US dividends, there's no UK tax to credit against your US bill, so you simply pay US tax on it. FIG can still help (US rates on qualified dividends and long-term gains are often lower than UK rates), but losing your personal allowance can cost more than it saves. Run the numbers with a US expat tax preparer who also knows UK tax before you claim.

The US side: you still file every year

Moving to London doesn't end your US filing. What follows you [8][9][10]:

Form 1040 every year. Americans living abroad get an automatic 2-month extension to June 15, but interest on any tax owed runs from April 15 [9].
Foreign tax credit (Form 1116) or the foreign earned income exclusion (Form 2555). The exclusion maxes out at $130,000 for 2025 and $132,900 for 2026 [8]. Because UK tax rates are relatively high, many Americans in London do better with the credit, and excess credits can carry forward.
FBAR (FinCEN Form 114) if your non-US accounts together top $10,000 at any time in the year [10]. That includes your UK current account, savings, and many pension and investment accounts.
Form 8938 (FATCA) if your foreign assets pass higher thresholds.

Two London-specific traps:

ISAs aren't tax-free for the IRS. The UK ignores ISA income; the US doesn't, and UK funds inside an ISA are often PFICs. See ISAs and US tax.
The tax years don't line up. Your UK P60 covers April to April; your 1040 needs January to December. Keep monthly payslips so you can split income and tax correctly.

The US–UK tax treaty

The current US–UK income tax convention was signed in 2001, amended by a protocol signed July 19, 2002, and entered into force on March 31, 2003. It generally applies to US taxes from January 1, 2004, and to UK income tax from April 6, 2003 [6].

What it does for you:

Sets tie-breaker rules if both countries treat you as resident.
Covers pensions, so contributions to and growth in UK workplace pensions can get favorable US treatment in many cases. See UK pensions and US tax.
Coordinates foreign tax credits so US-source and UK-source income isn't taxed twice in full.

What it doesn't do: the treaty's saving clause lets the US tax its citizens as if the treaty didn't exist, except for listed provisions. So the treaty never makes you exempt from filing a 1040.

The totalization agreement

The US and UK have a totalization agreement, in force since January 1, 1985 [7]. It prevents double Social Security and National Insurance taxes on the same work:

Employees sent by a US employer for an assignment expected to last 5 years or less generally stay in US Social Security and skip UK National Insurance [7]. You'll need a certificate of coverage.
Local hires in London usually pay UK National Insurance only.
Self-employed people are generally covered by the country where they live, so a freelancer living in London pays UK contributions, not US self-employment tax, with a UK certificate of coverage attached to the US return.
Benefits: if you don't have enough credits in one system, the agreement can combine your US and UK work records to help you qualify [7].

A simple order of operations

Get a National Insurance number and make sure your employer has your correct tax code.
Keep monthly payslips and your P60 each April.
File Self Assessment if you have untaxed income or want to claim FIG.
File your 1040 by June 15 (or October 15 with an extension), with Form 1116 or 2555.
File your FBAR for your UK accounts.

For a sanity check from people who've done it, ask in our community group for Americans in the UK. For your own numbers, a US expat tax preparer (or lawyer) can check your situation.

UK taxes for Americans: HMRC, the IRS and how the two returns fit together