Moving to the US? What UK Expats Must Know About Tax, Pensions & ISAs

Relocating from the UK to the United States is more than a change of address; it is a change of tax universe. The US taxes residents on worldwide income, introduces an unfamiliar vocabulary of account types, and treats some of your existing UK assets in ways you would never expect. Approached as a checklist - some of it before you go, some after you arrive - it is entirely manageable. Approached on the fly, it tends to generate avoidable problems.

This article is for UK nationals relocating to the US for work, family, or retirement, and is the anchor for the rest of the US-inbound guidance in this series.

Before you leave the UK

The pre-departure window is precious because, for a short time, you are still taxed only in the UK. That makes it the natural moment to review your position with both countries in mind.

• Review your UK ISAs, pensions, and property, and understand how each will be treated once you are US-resident - particularly the ISA, which loses its US tax shelter.
• Consider, with advice, whether any action on investments is appropriate while you are still outside the US tax net, since the US will tax worldwide gains once you arrive.
• Gather records: cost basis for investments, pension valuations, and account histories, which are far easier to assemble before you go.
• Understand US residency start-date rules - the substantial-presence test and green-card rules - because the date you become US-resident matters.

On arrival in the US

The first weeks are about building a US financial foundation.

• Obtain a Social Security number or, if you are not eligible, an ITIN, which you will need for banking, payroll, and tax.
• Open US banking and establish aUS credit history, which starts from scratch on arrival.
• Learn the qualified versus non-qualified account distinction - 401(k)s, IRAs, Roths, and HSAs versus taxable brokerage accounts - which governs how your US savings are taxed.
• Sort health insurance and understand how the US system differs from the NHS, since coverage is tied to employment and choices for many people.

Once you are settled: the ongoing picture

After the basics, the cross-border issues come into focus.

Worldwide income reporting

As a US resident you report worldwide income, which now includes your UK income, pensions, and investments. UK taxpaid generally feeds a foreign tax credit so the same income is not taxed twice.

Your UK pension

A UK pension stays in the UK and is generally handled through the treaty rather than moved. An NT code may stop UK tax being deducted at source so you pay where you now live. This has its own article in the series.

Your ISA

An ISA loses its tax-free status in US eyes, becomes US-taxable, and usually holds PFICs. What to do about it - ideally planned before departure - is covered in a dedicated article.

Estate and residence review

US estate tax, UK inheritance tax, and the UK's residence-based rules all interact for someone who has moved. A review of your estate position belongs on the post-arrival list, not years later.

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A pre and post-arrival checklist

1. Before: review UK ISAs,pensions, and property, and take advice on any pre-departure action.
2. Before: gather cost-basis and valuation records and confirm your US residency start date.
3. On arrival: obtain an SSN or ITIN, open US banking, and begin building US credit.
4. On arrival: learn qualified versus non-qualified accounts and sort health insurance.
5. Settled: set up worldwide-income reporting and the foreign tax credit.
6. Settled: handle your UK pension (NT code) and ISA, and review your cross-border estate position.

An illustrative example

Consider a hypothetical British couple, both 50, moving to California. Before leaving, they gather records and take advice on their ISAs and a buy-to-let property; on arrival they obtain SSNs, open US accounts, and enrol in employer 401(k)s; once settled, they set up worldwide-income reporting, request NT codes for their UK pensions, and review their estate plan against US and UK rules. The move is large, but the checklist keeps it orderly. This example is hypothetical and for illustration only.