Relocate with confidence – protect your wealth, plan efficiently, and make your money work for you in America.
Moving from the UK to the United States is a life-changing decision — one filled with opportunity, adventure, and promise. Whether you’re relocating for career advancement, education, family, or lifestyle, it’s essential to prepare financially before you go.
The UK and US financial systems differ significantly — from taxation and pensions to investments, banking, and estate planning. Without proper planning, you could face unexpected tax liabilities, compliance issues, or inefficient use of your wealth.
Here’s how to ensure your move from the UK to the US is seamless, financially secure, and future-focused.
1. Why the US Appeals to UK Expats
The United States remains one of the most popular destinations for British professionals and families thanks to its:
- Dynamic economy and world-leading job opportunities.
- High-quality education and global universities.
- Variety of lifestyles, from vibrant cities to coastal and mountain living.
- Cultural and entrepreneurial spirit, attracting talent from across the globe.
But while the lifestyle is attractive, the US financial and tax landscape is complex — making sound, cross-border financial advice vital from the outset.
2. Understand Your Tax Residency
Before moving, it’s critical to determine when you stop being UK tax resident and when you become tax resident in the US.
- The UK Statutory Residence Test defines your residency status and whether you’ll owe UK tax after your move.
- The US Substantial Presence Test determines when you become liable for US federal tax.
The UK–US Double Taxation Treaty ensures you won’t be taxed twice on the same income — but proper timing and planning are key. An adviser can help you structure your departure to minimise your exposure in both countries.
3. The US Tax System – A New Financial Landscape
Once you’re US tax resident, you’ll be required to report your worldwide income to the Internal Revenue Service (IRS).
This includes:
- Earnings from employment or self-employment.
- Dividends and interest from savings and investments.
- Rental income from UK property.
- Pension income or withdrawals.
The US also enforces strict financial reporting rules, such as FATCA (Foreign Account Tax Compliance Act) and FBAR (Foreign Bank Account Reporting) for overseas accounts and assets.
Having a professional who understands both UK and US tax systems is essential to remain compliant and avoid costly mistakes.
4. Reviewing Investments Before You Move
Your existing UK investments may not be suitable once you live in the US.
- ISAs and UK investment funds lose their tax advantages and can trigger unfavourable US tax treatment.
- Many UK and European funds are classed as PFICs (Passive Foreign Investment Companies) by the IRS, attracting punitive tax rates and complex reporting.
- It’s often better to liquidate or restructure your investments before moving to ensure they’re compatible with US regulations.
A cross-border wealth manager can help you transition your portfolio into US-compliant investments — preserving tax efficiency and long-term growth potential.
5. Pensions and Retirement Planning
Your UK pension is one of your most valuable assets — and how it’s handled will depend on your circumstances and long-term goals.
Key considerations:
- You can usually retain your UK pension (such as a SIPP or workplace scheme), but withdrawals may be taxable in the US.
- QROPS (Qualifying Recognised Overseas Pension Schemes) may offer advantages for some US residents, though they require careful evaluation.
- Pension income is typically taxed in your country of residence under the UK–US Tax Treaty, but proper planning ensures maximum efficiency.
If you’re retiring in the US, it’s vital to design a pension income strategy that balances accessibility, taxation, and currency management.
6. Currency and Banking
Moving from a sterling-based economy to a dollar-based one introduces currency risk. Exchange rate movements can affect your:
- Income (if drawing UK pensions or rent).
- Investments (if denominated in GBP).
- Day-to-day spending (if converting from pounds to dollars).
Before moving:
- Open multi-currency accounts to simplify transfers.
- Use foreign exchange specialists for better rates than traditional banks.
- Consider currency-hedged investments to protect against volatility.
Proper FX planning ensures your income remains stable and predictable in dollar terms.
7. Property and Capital Gains
If you own property in the UK, you’ll need to decide whether to retain or sell before moving.
- UK Capital Gains Tax (CGT) applies to gains from the sale of UK property, even for non-residents.
- If you keep your UK home as a rental, you’ll pay UK income tax on rent, but this will also need to be reported to the IRS (with tax credits available under the treaty).
- If you buy property in the US, note that mortgage interest and property taxes are deductible under certain conditions.
A financial adviser can help coordinate your strategy to ensure property ownership remains tax-efficient across both countries.
8. Health Insurance and Protection
Unlike the UK’s NHS, the US operates a private healthcare system, meaning medical insurance is essential.
Before moving:
- Check whether your employer provides coverage or research private expat health insurance.
- Review your life and income protection policies, as many UK policies lapse once you move abroad.
- Consider international insurance options that cover you during the transition.
Having comprehensive protection in place safeguards both your health and your financial wellbeing.
9. Estate and Inheritance Planning
Estate and inheritance planning differ markedly between the UK and the US.
- The US has estate and gift taxes at the federal (and sometimes state) level.
- The UK continues to apply Inheritance Tax (IHT) on your worldwide assets if you remain UK-domiciled, even after leaving.
- Without coordinated planning, your estate could face double exposure in both countries.
A dual-qualified adviser can help you:
- Restructure assets using trusts or insurance-based solutions.
- Draft Wills that are valid in both jurisdictions.
- Protect your beneficiaries from avoidable taxation.
10. How Blacktower Can Help
At Blacktower Financial Management, we’ve been supporting British expatriates since 1986 — helping clients relocate, retire, and invest across borders with total confidence.
Our UK–US cross-border specialists understand both tax systems, reporting requirements, and investment frameworks, providing integrated financial strategies tailored to your goals.
We can help you with:
- Pre-departure planning and residency timing.
- Investment and pension restructuring for US compliance.
- Wealth management across currencies and jurisdictions.
- Estate and inheritance planning for transatlantic families.
- Insurance and protection advice for life in the US.
Whether you’re relocating for work, lifestyle, or retirement, we’ll help ensure your financial life transitions smoothly and your wealth continues to grow — globally and compliantly.
With Blacktower FM, you can rest assured knowing that your finances are in the hands of our highly experienced financial experts who specialize in wealth solutions for expats. From Wealth Tax to Mortgages, we have you covered.