5 Questions You Need to Ask Yourself if You're an American Relocating to the UK
For American expatriates relocating to the United Kingdom, navigating two tax jurisdictions, two types of pension schemes, two types of state pension, and differing investment regulations can be incredibly complex.
Without careful planning, American expats can face unexpected tax liabilities, inefficient retirement structures, and punitive taxation on US-held investments - but US financial advisors often lack an understanding of UK tax laws and investment regulations, while UK advisors may not fully grasp the complications that US investments bring.
Forth Capital's dual qualified US/UK international financial planners are experienced in providing bespoke cross-border planning solutions, helping you to avoid potentially costly pitfalls and maximise opportunities. So we have set out the key priorities and in this article listed the five key questions that you need to ask yourself if you're relocating from the States to the UK.
1. Are your investments US/UK compatible?
Many US investment platforms restrict non-US residents from updating portfolios, or block access entirely, and American expats often unknowingly hold investments that are not suitable for their UK residency status.
Have you had your portfolio reviewed from a UK perspective?
Our US/UK dual-qualified advisors will help you to assess and understand;
- the tax implications of your holdings in both jurisdictions;
- whether your US investments, such as Individual Retirement Accounts (IRAs), mutual funds, and 529 plans (for education expenses), are tax-efficient under UK rules; and
- whether your US and UK investments and assets are structured optimally.
We can help you to transition your savings and investments to IRS-approved, globally compliant structures that adhere to both US and local laws. These accounts offer flexibility to invest in a range of different asset classes while avoiding regulatory breaches.
2. Will your US pensions work for you in the UK?
Some US pension schemes are considered differently in the UK, and it is important that you are aware of these differences and how they may impact you whilst you are in the UK.
Because you are an American expat, there may be alternative options available to you which could provide you with greater flexibility and tax efficiency.
We can work with you to conduct a detailed analysis of your pension assets, to help you to determine and understand;
- the level of risk your retirement investments are exposed to and whether this aligns with your risk appetite and capacity for loss;
- the benefits you may be entitled to at retirement;
- whether or not you can take income while living in the UK and how that income may be taxed under UK and US rules; and
- what happens to your investments in the event of your passing.
For more information, download our Guide to Optimising Your US Retirement Savings - and to explore and determine what’s best for your circumstances, book an initial consultation with one of our US/UK dual-qualified advisors.
3. What is the 'FEIE' and the 'FTC' - and how could they benefit me?
Foreign Earned Income Exclusion (FEIE)
The Foreign Earned Income Exclusion (FEIE) allows American expats to exclude a certain amount of foreign-earned income from US taxes if they meet residency tests (Physical Presence or Bona Fide Residence).
However, claiming this allowance ($130,000 in 2025) requires meticulous paperwork, including IRS Form 2555. Missing deadlines or misinterpreting rules can nullify the exclusion, leaving you liable for unexpected bills. Forth Capital co-ordinates with international tax specialists to ensure eligibility and avoid double taxation.Foreign Tax Credit (FTC)
The Foreign Tax Credit (FTC) allows American expats to offset US tax liability with foreign taxes paid on the same income. Unlike FEIE, which excludes income from US taxation, the FTC provides a dollar-for-dollar tax credit, making it beneficial for those in high-tax countries.
And unlike FEIE, which only covers wages and self-employment income, FTC can be used for foreign pensions, dividends, rental income, and capital gains. Expats must file IRS Form 1116 to claim the credit. Forth Capital works with international tax specialists to ensure eligibility and avoid double taxation.
4. Do I need to worry about 'Currency Risk'?
As an American expatriate relocating to the UK and perhaps considering retiring abroad, holding your retirement savings in US dollars exposes you to exchange rate volatility. For example, if pound sterling were to strengthen from $1=£0.80 to $1=£0.70, a $100,000 IRA would fall in value to $87,500 in equivalent terms.
Our dual-qualified international financial planners can explore currency options for your investments to help mitigate the risk of fluctuating exchange rates, which could impact your wealth.
5. Do I need to re-think my inheritance planning?
When you relocate to the UK from the States as an American expat, it's important to ensure that inheritance and estate planning are part of your holistic financial plan.
The UK has specific rules regarding inheritance tax (IHT) which is levied at a rate of 40% on the value of your worldwide estate [i.e. your UK and international assets] exceeding the IHT thresholds¹ if you establish 'long-term UK resident' status.
And from a US estate planning perspective, in the event of your death if your beneficiary is not a US citizen only the first $60,000 of your US assets (i.e. your 401k and IRA retirement accounts, US real estate, and shares in US companies) is exempt from US estate taxes.²
Robust cross-border estate planning is required therefore to ensure that you comply with both US and UK legislation, and to ensure the smooth transfer of assets to future generations while minimizing tax liabilities and legal disputes.
Making the Complex Simple
A significant risk for high-net-worth individuals planning to leave the US is not appreciating the critical importance of their financial advisor having the requisite licences, appropriate qualifications, and practical experience to provide them with a holistic forward-looking cross-border planning strategy and ongoing advice after their re-location.
Most US-based advisors are not authorised to provide regulated advice in the UK and are unlikely to fully understand the tax and financial planning complexities that arise once you become a UK resident. This can result in sub-optimal outcomes that fall foul of international tax treatment, foreign investment regulations, or overseas pension considerations – potentially leading to avoidable tax liabilities, inefficient asset structuring and compliance breaches.
Relocation changes your financial landscape. Your tax residency shifts, the regulatory environment becomes more complex, and many familiar financial products become unsuitable or even non-compliant.
If your advisor does not have the right international perspective, they may overlook critical issues such as:
- Tax-efficient investment structures for your new country of residence.
- Pension transfer and consolidation options across different international jurisdictions.
- Estate planning that accounts for differing international inheritance laws and tax regimes.
- Ongoing advice and support that remains compliant wherever you choose to live.
Choosing a dual qualified advisor who understands both the UK and international tax, investment and financial planning frameworks, ensures that your wealth strategy remains aligned, compliant, and optimised – wherever life takes you. Importantly, it also provides you with peace of mind, knowing that your advisor can continue to support you; not only in preparation for your move, but throughout it, and on an ongoing basis thereafter.
At Forth Capital, we specialise in helping high-net-worth individuals navigate these complex challenges, offering tailored financial planning solutions that safeguard wealth across borders. From tax-efficient investment strategies to comprehensive succession planning, our goal is to ensure financial security for you and future generations.
To schedule an initial consultation contact us today or send us an email.
¹ HM Treasury - New residence-based regime for inheritance tax
² The information provided reflects our understanding of tax rates and regulations as of 22 May 2025, Please be aware that these can be subject to change and you should consult with a dual qualified financial planner and tax expert to discuss your specific persona circumstances before acting on this information.
This communication is for information purposes only and does not constitute financial, legal, or tax advice. Please schedule a meeting to receive advice on international financial planning and wealth management.
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