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.

What Americans in the UK Must Know About FIG and TRF Taxes

Harrison Swift

August 27, 2025

Tax

The UK’s overhaul of its tax system for non-domiciled individuals (non-doms) has created a seismic shift in how foreign income and gains are taxed. For Americans living in the UK — many of whom have long relied on the remittance basis — the introduction of the Foreign Income & Gains (FIG) and Temporary Repatriation Facility (TRF) regimes from April 2025 means rethinking how they manage their global finances.

In this post, we break down what these new regimes mean for Americans in the UK, and how you can make the most of them while navigating the ever-complicated US-UK tax landscape.

1. A Quick Recap: Why This Matters for Americans in the UK

For years, non-doms living in the UK could opt for the remittance basis, allowing them to only pay UK tax on foreign income and gains (FIG) brought into the UK. For Americans — who are taxed worldwide by the IRS regardless of where they live — this offered a crucial tool to avoid being double-taxed on foreign income.

However, with the remittance basis set to disappear from April 2025, and the new FIG and TRF regimes taking its place, Americans in the UK must now recalibrate.

2. What Is the FIG Regime?

The Foreign Income & Gains (FIG) regime is a 4-year relief for new UK tax residents who have not been resident in the UK for the previous 10 years. Under FIG:

Foreign income and gains are exempt from UK taxation for the 4-year window, regardless of whether they are brought to the UK.
UK income and gains remain fully taxable.
After the 4-year period, individuals become fully subject to UK tax on worldwide income and gains — no more remittance basis.

For Americans, this means they may still owe US tax on their foreign income, but UK tax may be deferred or eliminated for that period under FIG. Crucially, US-UK tax treaty provisions and foreign tax credits (FTCs) will continue to play a vital role in coordinating tax liabilities between the two countries.

Key consideration: Americans using FIG need to carefully structure their foreign investments to avoid unnecessary tax exposure when FIG ends.

3. What Is the TRF (Temporary Repatriation Facility)?

The Temporary Repatriation Facility (TRF) is a two-year window (2025-2026) that allows non-doms to remit previously untaxed foreign income and gains to the UK at a flat tax rate of 12% — far lower than the usual income tax rates (which can go up to 45%).

For Americans, TRF presents a strategic opportunity to “clean up” offshore accounts and bring funds into the UK at a reduced tax cost, potentially aligning with US tax timing.

Important: Because Americans are taxed on worldwide income by the US, any repatriated funds may already have been taxed in the US, but planning the interaction between TRF and US tax rules (e.g., foreign tax credits, timing of recognition) will be essential to avoid missteps.

4. What Should Americans in the UK Be Doing Now?

With these changes looming, here are some action steps for Americans living in the UK:

a. Review Your Domicile and Residency Status

Confirm whether FIG applies — it’s only for those who haven’t been UK tax residents for 10 years.
Review US tax home and residency ties — potential impact on US tax filing.

b. Map Out Your Foreign Income and Gains

Identify what’s been earned and where it sits (bank accounts, trusts, investments).
Consider whether and when to realize gains, especially before the remittance basis ends.

c. Plan for the TRF

Calculate the value of foreign income and gains that could be repatriated under TRF.
Coordinate UK and US tax implications, including FTCs and timing of reporting.

d. Coordinate with Dual-Qualified Advisers

Given the complex overlap between UK and US tax systems, working with advisers familiar with both jurisdictions is essential to avoid costly mistakes.

5. Trusts and Inheritance Planning: Don't Overlook the Knock-On Effects

Many Americans in the UK use foreign trusts for wealth planning. Under the new rules:

FIG-qualifying individuals may enjoy protection from UK tax on FIG in trusts during the 4-year period.
But after that, trust gains and income could become fully taxable in the UK, which could create double-tax risks if not carefully managed.

Also, UK inheritance tax (IHT) exposure could change dramatically if an American becomes deemed domiciled after living in the UK for 10+ years.

Tip: Now is the time to review existing trust structures, especially regarding distributions and how they interact with both FIG and TRF.

6. Final Thoughts: A Narrow Window of Opportunity

The combination of FIG and TRF offers Americans in the UK a limited-time opportunity to:

Shield foreign income and gains from UK tax for up to 4 years.
Remit historic offshore income to the UK at favorable rates.
Reassess and restructure global holdings before becoming fully exposed to UK taxation.

However, as with all things in cross-border tax, the devil is in the details. Figuring out how to align FIG and TRF with US tax obligations, including Foreign Account Tax Compliance Act (FATCA) reporting, Controlled Foreign Corporation (CFC) and Passive Foreign Investment Company (PFIC) issues, will require careful attention.

Need Help?

If you’re an American living in the UK and wondering how to approach FIG and TRF — and what these new rules mean for you and your family — now is the time to seek professional advice.

The tax landscape is changing, but with early action and the right strategy, it’s possible to minimize exposure and make the most of the available reliefs.

Disclaimer: This blog is for informational purposes only and does not constitute legal or tax advice. You should consult with a qualified adviser to discuss your specific circumstances.

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What Americans in the UK Must Know About FIG and TRF Taxes

1. A Quick Recap: Why This Matters for Americans in the UK

2. What Is the FIG Regime?

3. What Is the TRF (Temporary Repatriation Facility)?

4. What Should Americans in the UK Be Doing Now?