In this series of articles, we will discuss the timeline of a U.S. expat living in the U.K. — from pre-arrival all the way to lifetime resident. Each article will outline the challenges and planning opportunities to consider during each step of the journey.

U.S. citizens are in the unenviable position of being taxed on their worldwide income and gains. This simple fact causes many challenges for Americans when making seemingly simple financial decisions. Understanding the key pain points and questions to ask along the way can make all the difference.


In part one of the series, we will discuss some of the preparation Americans can do before moving to the U.K. to avoid some of the common areas that can cause complexity later on.

One of the things I have become increasingly sure of over the past few years is that I have no ability to predict the future. This even applies to things we think we have a fair degree of control over—like the direction of our own life.

Life is full unpredictable twists and turns that can end up changing the entire direction of your life—which is exactly what happened to me. In the fall (autumn for you Brits) of 2014, I thought I knew what the next few years of my life would look like. I was living in Baltimore, Maryland, comfortably close to family and friends and had a stable job. I thought I had it all mapped out. Then I met my (now) wife who, luckily for me, was visiting from the U.K. for a few months. And just like that life changed forever.

One might assume I thoroughly researched everything I needed to know and do in order to move my financial life over to the U.K. After all, I’ve spent my career helping people build and execute sensible, long-term investment plans. But of course I did what most people do when life is moving fast and financial decisions are on the line… nothing.

At this point, a bit of background on the U.K. tax system is probably helpful.

  • The U.K. tax year runs from 6th April to 5th April.
  • The U.K. has a residency based taxation system meaning that it taxes all individuals who are considered tax resident in the U.K. for the tax year in question, regardless of citizenship.
  • As a non-U.K. domiciled individual, you have the option of being taxed on all worldwide income and gains (called the Arising Basis) or you can be taxed only on U.K. source income and gains and certain assets you bring into the U.K. (called the Remittance Basis).
  • The Remittance Basis is ‘free’ for the first 7 years and costs between £30,000 and £60,000 per year between years 8-15.
  • Beginning in your 16th tax year, you are broadly taxed in the same way as someone who has lived in the U.K. their entire life.

For more information on the differences between the U.S. and U.K. tax systems click here.

What can you do before you move?

With the benefit of hindsight—and working closely with many people who have moved from the U.S. to the U.K.—I can tell you what I should and could have done to help avoid some common mistakes expats often make before moving.

1. Determine the date you will become officially tax resident in the U.K.

Knowing the date you will become (or became) tax resident in the U.K. is the starting point to understanding the potential planning opportunities you have available to you. In most cases, this will be the start of the tax year in which you move to the U.K.

Depending on your circumstances, you may be able to receive ‘split year treatment’ to be considered tax resident on the day you arrive in the U.K. or even to delay becoming tax resident until the next year. You should seek further advice if you think you may be in this position.

2. Initiate new account structures

Work with your bank and existing investment manager to establish new account structures that preserve your ability to bring assets into the U.K. without having to pay additional tax. This is one of the easiest and most often missed opportunities for basic planning before moving the U.K.

It involves having an understanding of what assets you may want to bring to the U.K. in the future and separating original capital (clean capital) from any future income or gains that are produced.

3. Review any current positions

Assess what current roles you are bringing over from the U.S. that may cause adverse U.K. tax consequences. This includes if you are a current or pending trustee on any revocable or irrevocable trusts and an active member of any LLCs or family partnerships.

In addition, if you are the beneficiary of any U.S. or foreign trusts, review the tax implications of current and future distributions with your accountant or lawyer to avoid potential double taxation.

4. Take stock of what you own

Have a good understanding of what assets (and liabilities) you own or have beneficial ownership over. This includes cash in the bank, property, investments, debt, and insurance—held outright in your own name or in trust.

It may make sense to sell or restructure assets that will be taxed inefficiently from a U.K. tax perspective once you move to the U.K.


Whether you plan to spend a few years, a few decades, or the rest of your life outside the U.S., Brown Advisory can deliver a comprehensive cross-border investment plan for you and your family that can move with you wherever life may take you. Learn more >

Billy Mathews, a U.S. expat himself, is a Portfolio Manager in our London office and helps U.S.-connected clients build U.S./U.K. tax efficient investment portfolios to meet their long-term goals and objectives.


This material is not intended to be, and shall not be construed as being, investment advice. Investment decisions should not be made on the basis of it. Past performance is not indicative of future performance and there is a risk that some or all of the capital invested may be lost. The information contained herein is based on materials and sources that we believe to be reliable. We make no representation, either express or implied, in relation to the accuracy, completeness or reliability of that information. The views expressed are those of the author and Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. Brown Advisory does not provide tax advice.