Filing US Taxes from the UK

This is a complete country tax guide for filing US taxes from the UK.

This guide explains how US and UK tax rules interact for Americans in the UK. Those who must file, 2025 income thresholds, key tax breaks, required forms, and how to avoid double taxation.

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Key takeaways

Topic	Key facts for 2025
Who must file	US citizens and Green Card holders with worldwide income over the filing threshold.
2025 income limits	Single (under 65): US$15,750 Head of Household: US$23,625 Married Filing Jointly: US$31,500 Married Filing Separately: US$5
Self-employment rule	File if net earnings exceed US$400.
Expats’ filing deadline	June 15, 2026 (with auto 2-month extension).
Main tax benefits	• FEIE: Exclude up to US$130,000 of earned income. • Foreign Tax Credit (FTC): Credit for UK income tax paid. • Child Tax Credit: Up to US$2,200 per child (refundable up to US$1,700).
Treaty & totalization	Prevent double taxation and duplicate Social Security payments.
Key reporting	FBAR (>US$10,000 in foreign accounts) FATCA (Form 8938) Form 5471 (UK company) Form 3520 / 3520-A (SIPPs).

Who needs to file US taxes from the UK?

If you’re a US citizen or Green Card holder in the UK and your income meets the 2025 threshold, you must file Form 1040. Salary, self-employment, investments, and UK pensions all count toward that threshold.

Filing thresholds for 2025

The minimum income levels that trigger a filing requirement are indexed for inflation each year.

For tax year 2025, the thresholds are:

Filing status	Income threshold
Single (under 65)	US$15,750
Head of Household	US$23,625
Married Filing Jointly	US$31,500
Married Filing Separately	US$5 (yes, really)

If your worldwide income is above these levels, you’ll need to file even if all your income was earned and taxed in the UK.

What if you’re self-employed?

If your net self-employment income is over US$400, you must file and may owe US self-employment tax—unless UK National Insurance coverage applies under the Totalization Agreement.

This rule catches a lot of freelancers and consultants off guard because even small gigs or side income can push you over the limit.

Choosing your filing status

Your filing status determines your tax brackets, standard deduction, and credit eligibility. For expats, the biggest decision is often whether to include your non-US spouse.

Married Filing Separately (MFS): Keeps a non-US spouse outside the US tax system (no ITIN or spouse income required). Smaller deduction and limited credits.
Married Filing Jointly (MFJ): Elect to include your non-US spouse (ITIN required) for a larger deduction and access to certain credits. The election remains until revoked with the IRS.
Head of Household (HoH): For unmarried filers with a qualifying dependent who lived with them over half the year. Not available if you’re married and living with your spouse.

💡Tip: If you’re unsure, start with MFS, it’s safe and simple. A tax professional can later check if electing MFJ or HoH gives a better outcome.

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Filing deadlines and extensions for US expats in the UK

US expats are granted an automatic extension until June 15, 2026, to file their 2025 tax return (payments due April 15, 2026). But if you owe US tax, payment is still due by April 15, the same deadline as everyone back home.

How the expat extension works:

Automatic 2-month extension: For Americans living outside the US, the due date moves from April 15 to June 15.
Extra 4-month extension (optional): File Form 4868 to push the deadline to October 15, 2026.
State taxes: If you still have ties to a US state (for example, owning rental property in California), you may also be required to file there. State deadlines can vary.

💡Tip: Even with extensions, paying your balance after April 15 adds interest. To avoid this, estimate and pay early, then adjust later as needed.

How the US-UK tax treaty and Totalization Agreement work

The US-UK Income Tax Treaty prevents double taxation and sets which country taxes wages, pensions, dividends, and other income. The US-UK Totalization Agreement prevents paying into both Social Security systems for the same work.

Key treaty points

Residency tie-breaker: If both countries could claim you as a tax resident, the treaty uses where your “permanent home” and “center of vital interests” are to decide.
Elimination of double tax: Income taxed first in the UK can usually be credited against US tax using the Foreign Tax Credit (Form 1116).
Pensions: The treaty allows the UK to tax UK pensions first, and then the US generally provides a credit for the UK tax paid.
Dividends and interest: The treaty caps withholding taxes (ranging from 0% to 15%) between the two countries.

The Totalization Agreement

The US-UK Totalization Agreement prevents duplicate social security payments.

If you work in the UK for a UK employer, you pay National Insurance, not US Social Security.
If you’re temporarily assigned to the UK by a US employer (usually under five years), you can stay under the US system instead.

Top US tax benefits for Americans in the UK (FTC, FEIE & ACTC)

Foreign Earned Income Exclusion (FEIE): You can exclude up to US$130,000 of earned income (salary or self-employment) if you qualify under:
- The Physical Presence Test: 330 days abroad in a 12-month period; or
- The Bona Fide Residence Test: you’ve settled in the UK long-term. (Form 2555)
  
  Note: Form 2555 can’t be combined with the Foreign Tax Credit on the same income.
Foreign Tax Credit (FTC): If you pay UK income tax, you can claim a dollar-for-dollar credit against your US liability using Form 1116. Because UK tax rates (up to 45%) are higher than most US brackets, the FTC often wipes out your US tax entirely.
Additional Child Tax Credit (ACTC): Expats with qualifying children under 17 may receive up to US$1,700 per child as a refundable credit, even if their tax bill is zero.

Make US taxes easier while living in the UK

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Common expat mistakes and how the streamlined program fixes them

One of the biggest mistakes Americans make after moving to the UK is assuming they’re done with the IRS. Unfortunately, the IRS doesn’t see it that way—citizenship means worldwide tax reporting, no matter where you live.

Frequent oversights:

Ignoring FBAR or FATCA filings for UK accounts
Forgetting to report UK pension balances
Thinking “no US income” means “no filing requirement”
Missing the annual Form 1040 deadline for several years

Streamlined Filing Compliance Procedure

If you’ve fallen behind, the IRS offers a catch-up path:

File the last three years of tax returns and six years of FBARs
Write a short “non-willful” statement explaining your oversight
Pay any taxes due (no penalties if accepted)

This program is ideal for genuinely unaware expats, not those who are deliberately non-filers. Once accepted, it clears your record and restores full compliance.

Reporting UK Pensions and Foreign Accounts (FBAR, FATCA, SIPPs)

FBAR – FinCEN Form 114

You must file an FBAR if the combined value of all non-US accounts exceeded US$10,000 at any time during the year. That includes:

UK current and savings accounts
Employer pensions (e.g., Nest, Aviva)
Joint or business accounts

FATCA – Form 8938

Form 8938 is filed with your tax return if your foreign assets exceed:

US$200,000 (single abroad) or US$400,000 (married abroad).

Note: It overlaps with FBAR but goes directly to the IRS, not FinCEN.

Type	Contributor	US Treatment	Forms Required
Employer Pension	Employer	Reported on FBAR & Form 8938	FBAR, 8938
Self-Invested Personal Pension (SIPP)	You (100% self-funded)	Commonly treated as a foreign grantor trust for US tax purposes (Forms 3520 and 3520-A required).	Forms 3520 & 3520-A
25% “Tax-Free” UK Lump Sum	—	Fully taxable in the US	Include in 1040 income

Caution: Missing Forms 3520 or 8938 can lead to steep penalties. Even zero-balance or dormant accounts count if they meet thresholds.

Getting ready to file your US taxes from the UK?

There’s a lot to consider, but don’t worry! We’ve got you covered.

Download our FREE US Tax Guide for Americans in the UK: A more in-depth guide to taxes for US expats in the UK. This will help you understand what to file, when, and how to stay compliant with the IRS.

GET YOUR FREE COPY

Reporting UK investments (ISAs, PFICs & property sales)

ISAs and PFICs

The IRS does not recognize UK ISAs as tax-free.

Stocks & Shares ISAs: Usually hold PFICs; file Form 8621 for each.
Cash ISAs: Interest is taxable but no PFIC filing needed.

Selling UK Property

When you sell your main home in the UK, the UK charges Capital Gains Tax (CGT).

The US also taxes the gain, but you may exclude up to US$250,000 (single) or US$500,000 (MFJ) if it was your primary residence for two of the last five years. You can claim a Foreign Tax Credit for UK CGT paid.

Owning a UK company: Form 5471 and GILTI explained

If you own shares in a UK Limited Company, the IRS considers it a foreign corporation.

That means extra reporting, even if you don’t pay yourself dividends.

What you’ll need:

Form 5471: Reports ownership and activity in foreign corporations (e.g., a UK Limited company you own).
GILTI (Form 8992): Applies if your UK company is a Controlled Foreign Corporation (you and US shareholders own >50%). Because the UK’s 25% corporate tax rate qualifies for the high-tax exemption, you typically owe no extra US tax but must still file.

The GILTI tax

GILTI (Global Intangible Low-Taxed Income) makes you report a portion of your company’s profits as if they were distributed.

However, under current rules, the UK’s 25% corporate tax rate typically qualifies for the high-tax exemption, meaning no additional US tax is due if properly elected.

Pro tip: Even if you owe no GILTI, Form 5471 must still be filed. The penalties for skipping it are steep, starting at US$10,000 per year.

Gifts, inheritances, and other transfers from the UK

Receiving money or property from UK relatives? Here’s how the IRS sees it:

Type	US tax treatment	Form
Gift or inheritance from a US person	May count toward the donor’s lifetime gift exemption; donor files Form 709.	Donor files Form 709
Gift or inheritance from a foreign person	Not taxable to you, but report on Form 3520 if total gifts or inheritances exceed US$100,000 in a year.	Recipient files Form 3520

Quick IRS Form checklist for US expats in the UK

Form	Purpose
1040	Main US individual tax return
1116	Foreign Tax Credit
2555	Foreign Earned Income Exclusion
114 (FBAR)	Foreign bank and pension reporting
8938	FATCA asset reporting
3520 / 3520-A	Reporting foreign trusts (SIPPs, gifts)
5471	Reporting foreign corporations (UK Ltd)
8621	Reporting PFICs (ISAs, mutual funds)
8992	GILTI calculation (CFCs)

Getting ready to file your US taxes from the UK?

There’s a lot to consider, but don’t worry! We’ve got you covered.

Download our FREE US Tax Guide for Americans in the UK: An in-depth guide to IRS rules for Americans living in the UK. This will help you understand what to file and how to stay compliant with the IRS.