How do UK and US tax residency rules differ for expatriates?

The UK uses the Statutory Residence Test (SRT) to determine tax residency, considering factors like days spent in the UK and connections such as employment or property ownership. The US, however, operates on a citizenship-based taxation system, requiring US citizens and green card holders to file taxes regardless of where they live. Non-citizens may also be subject to US taxes under the 'substantial presence test.'

What are the tax filing obligations for expatriates in the UK and US?

In the UK, tax residents must file a Self-Assessment tax return for income not taxed at source, with a deadline of January 31. In the US, citizens and residents must file an annual tax return reporting worldwide income, with a standard deadline of April 15. Expatriates receive an automatic extension to June 15, with the option to request further extensions.

How can expatriates avoid double taxation between the UK and US?

Expatriates can avoid double taxation by leveraging the UK-US tax treaty, which outlines taxing rights for specific income types. Additionally, US taxpayers can claim Foreign Tax Credits (FTC) for taxes paid to the UK and may qualify for the Foreign Earned Income Exclusion (FEIE), which allows them to exclude up to $130,000 (2025 figure) of foreign-earned income.

What are the social security considerations for UK-US expatriates?

The UK and US have a Totalization Agreement to prevent double social security contributions. This agreement ensures expatriates pay into only one system and can receive benefits based on contributions made to either country.

What are the reporting requirements for foreign assets in the UK and US?

In the US, taxpayers with foreign financial accounts exceeding $10,000 must file a Foreign Bank Account Report (FBAR) and comply with FATCA requirements. In the UK, residents must disclose foreign income and gains, with penalties for non-compliance.

What are the key takeaways for expatriates navigating UK and US tax laws?

Expatriates should: 1) Understand their residency status in both countries, 2) Leverage tax treaties and credits to avoid double taxation, 3) Stay compliant with reporting requirements like FBAR and FATCA, and 4) Seek professional advice to navigate the complexities of cross-border taxation.

Navigating RSUs Across the US and UK: What You Need to Know

Harrison Swift

September 18, 2025

Tax

Restricted Stock Units (RSUs) are a common part of compensation packages, especially in the tech sector. But when your tax footprint spans both the United States and the United Kingdom, things can get complicated quickly. If you’re living or working in the UK while receiving RSUs from a US-based company (or the other way around), it’s important to understand your tax obligations in both countries to stay compliant and avoid unexpected liabilities.

Timing Is Key: When Are RSUs Taxed?

One of the biggest challenges with RSUs across two jurisdictions is the timing of taxation. In the United States, RSUs are usually taxed as ordinary income when they vest. The value at vesting is included in your W-2 and subject to federal income tax, as well as Social Security and Medicare.

In the UK, RSUs are also taxed on vesting, but the situation can be more nuanced. The UK may apply different sourcing rules based on your residency and work history between the grant and vest dates. As a result, part of the RSU income might be considered UK-source and taxable by HMRC. This difference can create a mismatch between when and where tax is due.

Avoiding Double Taxation

These mismatches often lead to a risk of double taxation. For example, you may be taxed in the US at vesting and again in the UK when reporting the same income in a different tax year. The good news is that the US-UK tax treaty and foreign tax credit systems can help relieve double taxation—but only if properly applied.

Getting this right requires an understanding of both countries’ rules, careful record-keeping, and sometimes complex income allocation between jurisdictions.

Selling RSUs: What Happens Next?

Once RSUs vest, they convert into actual shares. If you decide to sell them, any gain from the sale may be subject to capital gains tax. In the US, this depends on how long you’ve held the shares since vesting. In the UK, CGT applies too, but with different rules around timing, exemptions, and tax rates.

If you’ve moved countries between vesting and sale, things get even more complicated. The gain might need to be split between tax years or countries, and special reliefs or reporting rules may apply.

Get the Right Advice

Dealing with RSUs is rarely straightforward, and cross-border tax issues add another layer of complexity. Timing differences, sourcing rules, and treaty reliefs all come into play. If you’re receiving RSUs from a US company and have UK tax obligations—or vice versa—it’s wise to seek professional advice.

A tax advisor with experience in international equity compensation and dual filing requirements can help you meet your obligations and avoid paying more tax than necessary.

Disclaimer

This blog post is intended for general information only and does not constitute tax, legal, or financial advice. Individual circumstances vary, and you should seek advice from a qualified professional before taking any action based on this content.

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