An introductory guide for British Expats considering U.S. relocation, discussing the unique experiences of British expatriates moving to the United States. It highlights the cultural and financial challenges they face, such as adapting to a new financial system and managing dual tax obligations, emphasizing the importance of personalized financial and tax planning advice to navigate these complexities effectively.
By Miles Sharpe
Fawley Wealth International | UK & US
Oscar Wilde, Winston Churchill and George Bernard Shaw famously commented on British-American commonalities, and as a British expatriate or dual citizen living in the United States, it’s become increasingly common to share experiences with other settlors who “moved here for a 3-year contract 15 years ago”.
The special relationship has never been closer. Over 22,000 British expats emigrate to the U.S. each year and this figure is rising given economic growth, progressive taxation and employment opportunities across the pond. In these 50 States, California, Florida and New York boast the highest British expat populations, which make up over 700,000 nationally.
As Chartered Accountants in the U.S., your clients, professional or social network connections may include British expatriates who face financial and tax complexities, and their unique financial lifecycle and planning needs create demand for customized personal advice. In this article, I hope to provide planning considerations to better serve the needs of expat client families, given my role as an independent fiduciary and with best client outcomes in mind.
As many expats are familiar, the timing of a move abroad can become the glue that creates roots and foundations for British citizens to remain expatriated, whether this be meeting a spouse, seeing the children through university or becoming a professional expat to shapeshift to other countries. It’s become easy to socialise with groups of likeminded people to watch The Six Nations, a Manchester Derby or The World Cup for example. Life in most States is therefore comfortable and increasingly familiar for many, which is why, unless professional or personal circumstances dictate, more families are deciding to stay.
The potential triggers to repatriate to Blighty can be more emotionally charged with elderly parental or sibling health struggles during later life, or children moving for graduate study or work. Whilst it’s difficult to find reliable statistics on U.S. emigration of Brits moving back home, the natural evolution or expat lifecycle is increasingly correlated to the needs of broader family and variables such as The National Health Service’s social care limitations.
As Chartered Financial Planners specializing in British cross border financial planning, we find limitations in the work of U.S. Financial Advisors and Private Bankers, and their circumstantial understanding of broad global expat influences. Whilst U.S.-centric, goal-based planning for example, may be comprehensive, adapting this to incorporate dual tax obligations of U.K. Pensions, drawdown versus annuity suitability, Social Security and State Pension, globally centric, multi-currency portfolio management, potential repatriation factors such as U.K. inflation and U.K. Long Term Care, are areas commonly left unaddressed.
To best advise our expat clients, we regularly consider their goals as part of their personal lifecycle in the context of the following 3 core circumstances:
- Immigrating: Shortly after moving to the U.S. for work or with family.
- Settling: Having become a U.S./U.K. dual citizen or Green Card Holder.
- Repatriating: Intending to settle back home.
Challenges
- Immigrating – British families who have recently moved from the U.K. to the U.S.
- Adapting to a new tax system, understanding U.S. tax residency rules and navigating the U.K.-U.S. tax treaty alongside corporate benefits offered, such as Healthcare.
- Considerations for home purchase and Mortgage qualification.
- Managing U.K.-based investments, pensions, and other assets in compliance with U.S. tax law.
- Understanding the tax implications of moving assets from the U.K. to the U.S.
- Protecting worldwide assets from U.K. Inheritance Tax whilst Domicile of Origin remains linked to the U.K. (for those qualified).
- Assimilating with local expat social groups.
- Settling – British expat families residing in the U.S. for several years
- Ongoing compliance with international tax filing obligations, including capital gains, U.K. inheritance (depending on Domicile of Choice status), and if qualified, U.S. estate taxes.
- Managing multiple pension systems, in the U.S. and U.K. and navigating how these interact.
- Dealing with the tax implications of major life events (e.g., U.K. inheritance).
- Repatriating – British expat families returning to the U.K.
- Timing a move back to the U.K. to avoid unfavorable tax consequences in either country, such as Exit Tax (for those qualified) and the U.K. Split Tax Year.
- Re-establishing National Health Service (NHS) and Private U.K. Healthcare coverage.
- Understanding how to maintain U.S.-based retirement accounts in a tax-efficient manner.
- Managing the cross-border implications of U.S.-based real estate, or business holdings when relocating.
- Currency Brokerage: setting-up a U.K. based account with a broker charging <0.8% on transactions.
- Coordinating Social Security and State Penson benefits with Windfall Elimination Provision (WEP) rules.
- Long Term Care considerations and planning.
- Inheritance Tax Planning (following Domicile of Origin recognition).
How a Cross-Border Financial Planner can assist
Dual-Tax Compliance: Coordination with Accountants to ensure correct international reporting and assistance with FBAR. Tax-efficient planning across both jurisdictions to help clients minimize liabilities (such as PFICs) through treaty benefits, credits, and deductions.
Mortgage & Property Transactions: Introducing specialist mortgage brokers aligned with expat borrowing and U.K. specialists for purchases, including timing and tax implications.
Currency & Banking: Assistance in opening appropriate U.S. or U.K. bank accounts and notifying them of changes in residency status to ensure proper tax reporting. Currency Exchange: Take advantage of favourable exchange rates and avoid unnecessary fees by using a preferred broker specializing in international transfers.
Healthcare: Registering with local Doctors, NHS GP and Healthcare Insurance.
Introduction to expat community organizations: The St. George’s Society in New York City, for example.
Global Liability & Estate Protections: Utilizing insurance broker relationships in the U.S. and U.K. to holistically protect family finances and introduce Estate Attorneys and Solicitors for respective Will, Power of Attorney and Trust provisions.
Globally Holistic Financial Planning: Creating a dual U.S./U.K. financial plan (where relevant) provides a complete view of their financial situation, covering everything from tax efficiency and compliance to investment management, retirement planning, and estate structuring.
Retirement Planning & Investment Coordination: Long-term expats hold both U.S. retirement plans (e.g., IRAs, 401(k)s) and U.K. pensions. Contributions, growth, and withdrawals are optimized from a tax perspective in both countries as part of a holistic plan.
Retirement Plan Management: Advising clients on how best to manage Defined Contribution, Defined Benefit, SIPPs, 401(k)s and IRAs, when moving back to the U.K. or retiring in the U.S.
Estate & Succession Planning: Assistance in structuring estate plans that consider both U.K. inheritance tax (IHT) and U.S. estate tax (if qualified), ensuring clients have the correct mechanisms (e.g., trusts, wills, gifting strategies) in place to protect their wealth and assets across both countries.
In Summary
Chartered Accountants in the U.S. advising British expatriates, may already maintain the expertise of preferred U.S. Wealth Managers, but collaborating with a cross-border financial planner can enhance the support you offer to your clients by considering their needs more holistically, and with their core life circumstances in mind.
Should you have any immediate client needs or simply wish to arrange a complimentary consultation to discuss a client case, please feel free to contact us: [email protected]
The information provided in this article is for general informational purposes only and should not be considered tax, investment or financial advice. U.S. and U.K. tax laws are subject to change and can vary depending on individual client circumstances. You should consult with a licensed professional for advice concerning your specific information.
