US Tax Guide for Dual Citizens Living in the UK

Dual citizens (US + UK) face unique US tax challenges. As US citizens, they owe US tax on worldwide income regardless of where they live. The UK's worldwide income taxation and the US-UK tax treaty create additional complexity. FileAbroad helps dual citizens in the UK navigate FEIE, FBAR, and the cross-border questions that complicate filing.

Key Tax Issues for Dual Citizens in the UK

• Worldwide US taxation: US citizens owe US tax on worldwide income, even if they live in the UK and are UK citizens.
• UK tax residency: If you spend more than 183 days in the UK or have your center of vital interests there, you are a UK tax resident. You may owe tax to both countries.
• FEIE: Dual citizens can claim FEIE on foreign earned income if they have a foreign tax home and meet the physical presence or bona fide residence test.
• FTC: Dual citizens can claim FTC for UK tax paid on income that is also taxed by the US.
• Remittance basis: Non-domiciled UK residents may be able to use the remittance basis (being phased out from April 2025).
• Totalization agreement: US-UK totalization agreement prevents double social security taxation.

FEIE vs FTC for Dual Citizens in the UK

FTC is often more valuable than FEIE due to high UK tax rates (up to 45% plus National Insurance). FEIE may be better for dual citizens in their first years abroad or with income below the FEIE limit.

FBAR & Reporting for Dual Citizens in the UK

UK bank accounts, ISAs, SIPPs, and investment accounts are reportable on FBAR if the aggregate value across all foreign accounts exceeds $10,000. Dual citizens often have accounts in both the US and UK.

Common Mistakes Dual Citizens Make in the UK

1. Not filing US tax returns — US citizens owe US tax on worldwide income regardless of where they live.
2. Not reporting UK accounts and ISAs on FBAR — All foreign accounts are reportable.
3. Not understanding the remittance basis — The rules are changing from April 2025.
4. Not claiming FEIE or FTC — These tools can significantly reduce your US tax.

When to Get Professional Help

You should consider professional help if you have foreign accounts exceeding $10,000, complex income situations, or questions about the remittance basis.

FileAbroad reviews each engagement personally.

Tell me about your situation → /intake

FileAbroad explains U.S. federal tax and U.S. international information-reporting consequences of documented foreign facts. It does not provide foreign-country legal or tax representation, valuation opinions, banking or remittance advice, or advice on what a foreign authority will accept.

Scope statement reviewed 2026-08-30 · FileAbroad product/content owner