Brian Dunhill is the co-founder and portfolio manager at DF-direct.
To loosely paraphrase the early-aughts film Zoolander, “The U.K. is so hot right now.” Leading property website Rightmove reports that, in recent weeks, inquiries about U.K.-based properties from current American residents have surged 19% compared to the same time in 2024. Concerns about the economy, tariffs and political upheaval have fueled American uncertainty and interest in moving overseas. As an English-speaking country, the U.K. is an attractive option for many aspiring expats.
In our line of work, we see many Americans coming to the U.K. for career shifts, or under the skilled worker visa (whereas we see more retirees heading to France, taking advantage of the long-stay visa). Pre-planning is especially crucial for expats who are still in the workforce, as most working individuals will still have retirement accounts and investment accounts in the United States.
The good news: Keeping accounts in the U.S. usually isn’t a problem. In fact, we encourage our U.K.-emigree clients to keep investments stateside. This helps clients avoid Foreign Bank Account Report (FBAR) complications, still receive 1099s, lowers costs and allows clients to retain protections by staying with U.S. broker-dealers.
That said, some U.S. broker-dealers won’t work with clients who have a U.K. address. Frankly, when this happens, it’s based more on a lack of knowledge than legal prohibition. If your U.S. advisor says, “I can’t help you over there,” it’s probably because they’re not Financial Conduct Authority (FCA) licensed. By our count, there are 83 firms here in the U.K. that are licensed in both the U.K. and the U.S. You’ve got options. If your US-based firm isn’t willing to work with you from the U.K., find one that will.
Any American moving to the U.K. should work with someone licensed in both countries. Beyond simply finding someone willing to work with you, it’s important for any expat’s financial advisor to deeply understand both your old home’s and your new home’s taxation systems. Details matter.
Steps For Financially Secure Relocation
For Americans in the “considering” stage of relocating overseas, particularly to the U.K., here’s how we advise you to make a cogent financial plan to avoid stress across the pond:
1. Gain HMRC awareness.
Review your current portfolio against the HM Revenue & Customs (HMRC)-approved list. Anything not on the list needs a closer look. That doesn’t mean you have to sell everything, though. Let’s say you bought SPY 20 years ago; selling it now could trigger significant capital gains.
The question becomes, “Which assets can I ‘clean up’ and make U.K.-compliant, and which ones am I holding long-term?” A lot of people come to the U.K. for a few years. You don’t need to sell (or gift) everything—just the assets you might need to access while you’re here.
2. Build a dual-country pension plan.
U.S. pensions are fine in the U.K., whether or not you plan to stay long-term. In addition, Americans in the U.K. can contribute up to £60,000 per year to a U.K. pension. That’s a huge opportunity.
Call your HR department. Ask if you’re maximizing your pension contributions. Find your limit, and contribute what you can. Don’t be shy about using your U.K. pension. It lowers your U.K. taxes, and it integrates well with the U.S.-U.K. double taxation treaty.
3. Don’t neglect your ROTH.
You can still contribute to an IRA in the U.S., too, as long as you’re using the foreign tax credit system rather than the foreign earned income exclusion (FEIE). That’s the catch. Americans in the U.K. actually get to double-dip by contributing to both an IRA and a U.K. pension. It’s like having an IRA and a 401(k) in the U.S.—and it’s a big advantage.
If you’re under the income limits, don’t have pre-existing IRAs and are not subject to the Pro-Data Rule, you can do a backdoor ROTH. If you’re below the phase-out range, you can contribute directly to a ROTH. Either way, that money grows tax-free on both the U.S. and U.K. sides.
4. Learn about ISAs.
We always tell our clients to get informed about Individual Savings Accounts (ISAs). These are amazing for non-Americans: You can contribute up to £20,000 per year, the money grows tax-free and you can withdraw it at any time … also tax-free. Every non-American should absolutely have an ISA.
For Americans, the viability of an ISA depends on a few factors. If you’re American, you want to avoid U.K.-domiciled ETFs and mutual funds because they trigger passive foreign investment company (PFIC) tax rules in the U.S.
A lot of firms labor under a certain misperception: “Americans can’t use ISAs.” That’s untrue. But Americans do need a specialized firm that can build an ISA portfolio with just cash, bonds and U.S. individual stocks. It can be done, but it takes knowledge and creativity.
5. Gain clarity about SIPPs.
If or when you leave the U.K., you can transfer your pension to a self-invested personal pension (SIPP). To clarify, this is different from the U.S. “simplified individual pension plan,” which shares the same acronym.
It’s important to talk to your tax accountant before setting up a SIPP. Some U.S. tax professionals consider SIPPs to be foreign trusts, which would require annual reporting. Others don’t. As with many cross-border tax issues, the rules are ambiguous; professional assessments will vary based on levels of risk tolerance. So, you want to ascertain up front how this will be viewed.
6. Keep gifts and trusts for kids on the U.S. side.
Finally, let’s talk about 529 plans (the U.S. education savings plans) and the Uniform Transfer to Minors Act (UTMA) and the Uniform Gifts to Minors Act (UGMA). There’s zero mention of 529s in the U.S.-U.K. tax treaty, so any interpretation is just that—interpretation.
UTMAs and UGMAs are considered foreign trusts in the U.K., even though we in the U.S. see them as simple kids’ accounts. So the safest route is to keep those accounts stateside. They’re not illegal, but they fall into gray areas and risk misinterpretation. Better to stay clean and compliant.
The Importance Of Flexibility
A lot of financial content online focuses on mechanics—what accounts you can open, how much you can contribute. One of the most important mindset shifts Americans need to make when moving abroad, especially to the U.K., is how they view currency. The U.S. has enjoyed years of dollar strength, which made it easy for U.S.-based advisors to say, “Stay in dollars, you’ll benefit from currency appreciation.” Now, that tailwind may be ending. This doesn’t necessarily mean the dollar is collapsing, but it does mean expats should think differently about where their “safe” money lives.
Any plan worth its salt should be built around keeping doors open. Keeping a substantial portion of your assets in the U.S. gives you flexibility; those assets remain functional whether you end up retiring in France or the U.K. or going back to the States.
Ultimately, this period of economic uncertainty is creating questions for people who are now re-envisioning where they see their lives in both the short and long terms. Good financial planning is also about diversification and maintaining the ability to pivot—and the security of knowing that, wherever you land, you’ll be okay.
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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