US filing basics for Americans in United Kingdom
Living in United Kingdom does not terminate your U.S. federal income tax obligations. U.S. citizens, green-card holders, and certain long-term residents are taxed on worldwide income on a citizenship or residency basis, regardless of where the income is earned or where you reside. You generally must file Form 1040 (or 1040-SR) when gross income exceeds the annual IRS filing threshold, typically $15,000 to $30,000 or more depending on filing status, age, and dependency for recent tax years (exact amounts published in IRS Rev. Proc. documents and inflation-adjusted). Even if no tax is ultimately due after credits and exclusions, filing is usually required to claim benefits such as the Foreign Earned Income Exclusion (FEIE) under IRC §911 (up to $130,000 for tax year 2025 per IRS Rev. Proc. 2024-40) or the Foreign Tax Credit (FTC) for taxes paid to United Kingdom authorities.
US tax treaty with United Kingdom
The United States has an income tax treaty with United Kingdom for many common issues, treaty articles must be applied to your facts.
Local considerations in United Kingdom
Large US population. Common pitfalls include skipping US filing due to UK PAYE withholding, missing FBAR/FATCA (they are separate from the 1040), and treating ISAs as US-tax-free (many UK funds/ETFs in ISAs or pensions can be PFICs with onerous Form 8621 requirements). UK pensions generally do not qualify for US tax-deferral like 401(k)s; the US-UK treaty may provide relief for contributions/earnings but requires analysis and often Form 8833 disclosure. Form 5471 may apply for UK companies.
Common services needed by expats in United Kingdom
Most Americans abroad in United Kingdom need help with at least one of the following core compliance areas, which frequently interact:
- US expat tax returns, Form 1040 with FEIE, FTC, treaty positions, and any required state returns.
- FBAR reporting, FinCEN Form 114 for foreign financial accounts exceeding $10,000 aggregate at any time during the year.
- Form 8938 (FATCA), IRS disclosure of specified foreign financial assets when thresholds are met.
- Streamlined catch-up filing, For eligible non-willful taxpayers with prior unfiled years.