UK Taxes for US Exposed Persons Moving to The UK

The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £12,570.

Upcoming changes –

You do not get a Personal Allowance on taxable income over £125,140.

Individual Savings Accounts (ISAs) allow you to put £20,000 to work each year, tax free. This is because when buy and sell shares housed within an ISA, any gain is exempt from CGT.  Beware of PFICs . Click here for more information. 

You can also set up an interest bearing cash ISA which can also be UK tax free and not be considered a PFIC.

Gifts between spouses/civil partners are generally exempt from CGT. If you gift an asset to your spouse, there’s no CGT to pay at the time of transfer and the receiving spouse assumes the original cost basis (original purchase price) for CGT purposes. 

Formerly Entrepreneurs’ Relief, this relief is subject to specific conditions but allows you to pay a reduced CGT rate of 10% when selling business assets. This comes into play when selling all or part of your business or assets used within a business. This capital gains tax relief can be applied up to a maximum limit of £1 million in gains over your lifetime.

UK Stamp Duty Land Tax (SDLT) is charged on purchasers of UK homes, by reference to the purchase price. Rates are hiked by two per cent for non-UK resident buyers (note SDLT has its specific residency rules) and five per cent for buyers who already own a residential property.

The two per cent non-resident surcharge can be reclaimed, broadly, where the buyer spends 183 days or more in the UK, in one of the years either side of the transaction. 

UK capital gains tax (CGT) applies on gains realized on a disposal of a UK home by a US person, depending on the person’s other income and capital gains in the relevant year.

However, where the property is used as the buyer’s main residence, full relief from CGT is possible. Relief is available where the owner is UK resident and in limited (and rare) circumstances where the buyer is non-UK resident.

Equivalent US tax relief on the same gain is less generous.   For mixed nationality spouses, it may be more efficient for the property to be owned by the non-US spouse solely.

You do not have to pay CGT on other UK assets such as shares in UK companies, unless:

• • You return to the UK within five years of leaving, or
  • You sell shares in a “UK property rich” company and you meet the conditions for an indirect disposal. A company is considered “UK property rich” if 75% or more of the company’s gross asset value is UK land.

There is a 32% tax on your gains from ‘carried interest’ if you manage an investment fund

Provided an item sells for less than £6,000, you can sell personal belongings such as antiques, artworks, or jewelry without paying CGT

For people moving to the UK for the first time or after living abroad for at least 10 years? Foreign income and gains are tax-free for the first four years in the UK. After that, normal UK tax rules apply.

For the first 10 years of UK residence, individuals are only subject to UK IHT on UK assets. After that, if they have been UK resident for 10 out of the previous 20 years, they become ‘long-term residents’ for IHT purposes, and their worldwide assets fall within the UK IHT net.

To avoid becoming an LTR, individuals need to leave the UK before the end of the ninth year. There is also a ‘tail’ rule: after leaving, they remain within the UK IHT net for between three and 10 years, depending on how long they were UK resident before departure.

For as long as a US citizen remains non-LTR, the value of UK assets (including any UK home) will be subject to IHT at a flat rate of 40 per cent on the value that exceeds the deceased’s available ‘nil rate band’ amount (NRB) of up to £325,000, subject to certain reliefs and exemptions. This NRB amount can increase in certain circumstances but is dwarfed by the equivalent US federal estate tax exemption amount (for 2025 this is $13,990,000 per individual, or $27,980,000 for a married couple; and $15,000,000 per individual, or $30,000,000 for a married couple, from 2026). Due to the disparity in the UK nil rate band and the US federal estate tax exemption amount, in some cases, the estate of a US citizen may be subject to a significant amount of IHT, even where there is no US estate tax liability at all.

Certain investments which are advantageous from a US tax perspective may suffer adverse UK tax treatment. Take mutual funds: they may be taxable at higher UK income tax rates.

Holdings in LLCs can be problematic too: The UK will likely treat LLCs as opaque, but the US as transparent, for tax purposes. Click here.  

That means the US person shareholder will be taxed in the UK on distributions from the LLC but in the US on the LLC’s profits. With tax considered paid on different sources of income, the UK may give no credit for the tax paid in the US.