Do Americans living in the UK still have to file US taxes?

Generally yes. US citizens and green-card holders file a US federal return on worldwide income wherever they live, and UK tax residence does not end that. UK income tax under PAYE is usually high enough that the Foreign Tax Credit on Form 1116 removes most or all of the US tax on salary, but the return and any reporting forms are still required.

Is my Stocks & Shares ISA tax-free to the IRS?

No. HMRC's tax-free ISA status is a UK domestic rule with no US counterpart, so income and gains inside an ISA are still reportable on a US return. Cash ISAs are simpler — mainly interest income — but a stocks-and-shares ISA commonly holds non-US pooled funds, which raises the PFIC question independently of the wrapper.

Are the funds inside my ISA or SIPP PFICs?

Often, yes. UK platforms typically stock Irish- or UK-domiciled OEICs, unit trusts and investment trusts — non-US pooled vehicles that commonly meet the §1297 income test (75% or more of gross income is passive) or asset test (50% or more of assets produce, or are held to produce, passive income). It is an annual, per-fund test, so each holding should be confirmed rather than assumed. Individual shares in Shell or AstraZeneca are not PFICs.

Do UK bank and building society accounts count for the FBAR?

Generally yes. A current account, savings account, an ISA and a Building Society account at a UK institution are non-US financial accounts, and the combined peak value across all of them counts toward the $10,000 FinCEN Form 114 threshold — even though HMRC has already taxed or exempted the income. Signature authority over a UK account, even one you don't own, counts too.

Do I need Form 8938 for my UK accounts and investments?

Possibly, and it is a separate test from the FBAR. For a single filer living abroad Form 8938 starts at $200,000 in specified foreign financial assets at year end or $300,000 at any point; married filing jointly, $400,000 and $600,000. It reaches a broader class of assets than the FBAR — including a SIPP in some cases — so the two thresholds do not move together.

How is my SIPP or workplace pension treated for US tax?

It depends on the arrangement, and classification comes before any treaty article applies. A SIPP is a defined-contribution personal pension; an employer's auto-enrolment workplace pension is typically occupational. Article 17 of the US–UK treaty addresses pensions, but whether contributions, growth and eventual withdrawals are currently taxable to the US, and what has to be reported, turns on how the specific arrangement is characterised.

Can UK income tax reduce my US tax through the Foreign Tax Credit?

Generally yes. UK income tax withheld under PAYE on employment income is creditable on Form 1116, computed by income category and limited to the US tax on that category, and it usually exceeds the US tax on the same salary. Dividend and interest income inside an ISA is UK-tax-free, though, which means there is no UK tax to credit — the US liability on that income is not automatically zero just because the wrapper is.

Why does the UK's April-to-April tax year matter for my US return?

The US return runs on the calendar year; the UK tax year runs 6 April to 5 April. A UK P60 or SA302 does not map onto a US calendar year without splitting the period, which matters for lining up PAYE withholding and any Foreign Tax Credit claim with the correct US tax year.

Does the US–UK totalization agreement affect my National Insurance or Social Security?

It can. The agreement assigns social-security coverage to one country rather than both, documented by a certificate of coverage, so it governs where contributions are due for a worker moved between the US and UK. It does not by itself change how a pension benefit is taxed once received — that is governed separately by the income tax treaty.

United Kingdom · US corridor

US expat taxes in the UK —
your ISA isn't tax-free to the IRS.

A US citizen living in the UK generally stays inside the US federal filing system on worldwide income. PAYE withholding is usually high enough that the Foreign Tax Credit removes the US tax on salary — so the hard part isn't the tax. It's that HMRC's two flagship tax shelters, the ISA and the SIPP, mean nothing to the IRS, and the funds inside them are commonly PFICs.

Check my UK filing The UK treaty desk

Free diagnostic and on-screen summary — you pay only to generate the package.

What actually applies

The layers a UK return runs through.

Not everyone needs every form. These are the layers that come up most for Americans in the UK, and what makes each one bite here.

US filing layers that commonly apply to a US person living in the UK
Form	What it is	What makes it bite in the UK
Form 1040	The US federal return, on worldwide income.	Filed regardless of UK residence. The UK tax year runs 6 April to 5 April, so a P60 or SA302 needs splitting to line up with the US calendar year.
Form 1116	Foreign Tax Credit for foreign income tax paid.	PAYE income tax usually exceeds US tax on the same salary. ISA income is UK-tax-free, so there's nothing to credit against whatever US tax applies to it.
FinCEN 114 (FBAR)	Report of non-US financial accounts once the combined peak exceeds $10,000.	Current accounts, savings, ISAs, a Building Society account. UK banking spreads balances across accounts, and the FBAR aggregates them all.
Form 8938	FATCA reporting of specified foreign financial assets, filed with the return.	Higher thresholds than the FBAR — from $200,000 year-end for a single filer abroad — but a broader class of assets, which can reach a SIPP.
Form 8621	One per PFIC per year, subject to the form's own triggers.	OEICs, unit trusts and investment trusts held in an ISA, SIPP or general account. This is where a routine UK return stops being routine.
Form 8833	Disclosure of a treaty-based return position that overrides the default treatment.	Not needed for the ordinary Form 1116 credit. An Article 17 pension position is the usual reason it comes up.
Streamlined (Form 14653)	The catch-up route for non-willful taxpayers living abroad.	A common path for the long-settled American population across London, Edinburgh and Manchester.

A form listed here does not mean it applies to you. Which of these your return needs depends on your accounts, holdings and income.

Salary and accounts

The easy half of a UK return.

PAYE withholding does most of the work. It is worth knowing which parts are genuinely simple before getting to the parts that are not.

PAYE and the Foreign Tax Credit

Income tax withheld at source under PAYE, plus employee National Insurance, generally exceeds the US tax on the same salary. Form 1116 credits it category by category, and the residual US tax on employment income is commonly zero.

Your P60 and payslips are the cleanest evidence of UK tax actually withheld — exactly what the credit needs, once the April–April period is split to the US calendar year.

How the Foreign Tax Credit works →

UK accounts: reporting, not tax

A current account, a savings account, an ISA, a Building Society account — each is a non-US financial account. The FBAR adds their peaks together, so accounts that each look modest can cross $10,000 between them.

HMRC treating an ISA as tax-free changes nothing here. The FBAR and Form 8938 layers are independent of UK domestic tax treatment.

FBAR from the UK, in detail →

If you hold an ISA or SIPP

A Stocks & Shares ISA full of index funds?

It is the standard UK financial advice and, for a US citizen, a standard PFIC problem. Hargreaves Lansdown, AJ Bell, interactive investor and most UK platforms sell Irish- or UK-domiciled OEICs, unit trusts and investment trusts, because there is no US-domicile equivalent on the mainstream UK retail shelf. Generally one Form 8621 per fund per year — inside an ISA or a SIPP just as much as in a general investment account.

Direct shares in Shell, AstraZeneca or Unilever are not PFICs, and neither is a UK gilt held directly.

PFICs in the UK, in full Check my ISINs

Two UK-only wrinkles

What HMRC's tax-free wrappers don't change for the IRS.

An ISA and a SIPP are the two products almost every American in the UK ends up holding. Neither reads across to a US return the way you'd expect.

The ISA wrapper carries no US relief

Cash ISA interest is straightforward interest income on a US return. A stocks-and-shares ISA is where it gets harder: the wrapper is invisible to the IRS, and the OEICs or unit trusts typically held inside it are PFICs in their own right.

A SIPP needs classifying before Article 17 applies

Whether a SIPP is treated as a qualifying pension for US purposes, what that means for current-year taxation of growth, and what reporting applies, has to be worked out from the arrangement's own terms — not assumed from the tax-free UK label.

The April–April tax year

HMRC's tax year runs 6 April to 5 April; the US return runs the calendar year. A P60 or SA302 covering the wrong twelve months produces a Foreign Tax Credit claim in the wrong US year unless the periods are reconciled.

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Check your ISA or SIPP for PFICs.

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1 · Where do you live?

Where you live changes the products you are likely to hold and the guidance you get next. It does not change how the PFIC rules classify a holding — those turn on the fund, not your address.

2 · Where do you hold it?

3 · What do you hold?

Or paste your ISINs — one per line

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More for US taxpayers in United Kingdom: PFICs for Americans in the UK.

Educational estimate, not tax advice. Domicile is the fund's legal home, not the broker or exchange you used. Broker and provider policies change — confirm current terms with your provider before acting.

Behind on filings?

The penalty-free route back, from the UK.

The UK has one of the largest long-settled American populations anywhere outside the US, and a steady stream of people who find out years in. The programme exists for exactly that.

A qualifying taxpayer files the most recent 3 years of returns and the most recent 6 years of FBARs, with the offshore penalty at 0%. Two gates: non-willful conduct, and the non-residency test — at least 330 days abroad in at least one of the last three years.

On PAYE salary, the tax across those years is often little or nothing after the credit for UK tax. The volume is in the information returns — a Stocks & Shares ISA held for several years produces one Form 8621 per fund per year across the whole window.

You certify non-willfulness on Form 14653, under penalty of perjury. Atamatax prepares the return side and does not generate Form 14653, assemble the mailing, or transmit anything to the IRS or FinCEN.

Check Streamlined eligibility The Streamlined process, in detail

The treaty, in short

The 2001 convention, and the 2002 Protocol.

US–United Kingdom Convention 2001

The convention allocates taxing rights and provides relief from double taxation — for a US citizen, almost always as a credit on Form 1116. The saving clause preserves US taxation of citizens subject to the exceptions listed in Article 1.

Article 10 — dividends. Article 11 — interest. Article 13 — capital gains.
Article 17 — pensions and similar remuneration.
Form 8833 is for a position that overrides the default treatment, not for the ordinary credit.
Nothing in the convention displaces the PFIC rules, which are US domestic law.

The United Kingdom treaty desk, article by article →

The UK treaty desk does the article-level work, including how the ISA and SIPP wrappers actually resolve. This page exists for the broader question of what living in the UK does to a US return.

London has its own guide too, for city-level detail on City finance equity compensation and Canary Wharf employers.

The UK desk

Every UK–US guide on the site.

FBAR for Americans in the UK

How UK current accounts, ISAs and SIPPs count toward the $10,000 combined-peak FBAR threshold, and how the FBAR differs from Form 8938.

PFICs & Form 8621 for Americans in the UK

Why UK ISAs, investment trusts and OEICs are often PFICs for U.S. persons, and what Form 8621 means for each fund you hold.

U.S. Tax Filing for Americans in London

Fixed-fee support for U.S. citizens and Green Card holders in London — UK salary and PAYE, ISAs and SIPPs, City finance equity, FBAR and FATCA reporting.

United Kingdom · US treaty desk

The 2001 convention and 2002 Protocol, article by article.

FBAR & Form 8938 threshold checker

Test your UK account balances against both thresholds.

All country desks

US filing abroad, adapted to where you live.

Other country desks

The layers a US return runs through don't change by country — what changes is which local accounts, funds and pensions actually trigger them. Here's how United Kingdom compares.

France

PEA · assurance-vie · PFIC

Canada

RRSP · TFSA · Form 3520

Australia

Superannuation · franking credits · PFIC

Netherlands

Box 3 · 30% ruling · Dutch funds

Spain

Fondos de inversión · Planes de pensiones · PFIC

US taxes in the UK — the questions we get

Do Americans living in the UK still have to file US taxes?#: Generally yes. US citizens and green-card holders file a US federal return on worldwide income wherever they live, and UK tax residence does not end that. UK income tax under PAYE is usually high enough that the Foreign Tax Credit on Form 1116 removes most or all of the US tax on salary, but the return and any reporting forms are still required.
Is my Stocks & Shares ISA tax-free to the IRS?#: No. HMRC's tax-free ISA status is a UK domestic rule with no US counterpart, so income and gains inside an ISA are still reportable on a US return. Cash ISAs are simpler — mainly interest income — but a stocks-and-shares ISA commonly holds non-US pooled funds, which raises the PFIC question independently of the wrapper.
Are the funds inside my ISA or SIPP PFICs?#: Often, yes. UK platforms typically stock Irish- or UK-domiciled OEICs, unit trusts and investment trusts — non-US pooled vehicles that commonly meet the §1297 income test (75% or more of gross income is passive) or asset test (50% or more of assets produce, or are held to produce, passive income). It is an annual, per-fund test, so each holding should be confirmed rather than assumed. Individual shares in Shell or AstraZeneca are not PFICs.
Do UK bank and building society accounts count for the FBAR?#: Generally yes. A current account, savings account, an ISA and a Building Society account at a UK institution are non-US financial accounts, and the combined peak value across all of them counts toward the $10,000 FinCEN Form 114 threshold — even though HMRC has already taxed or exempted the income. Signature authority over a UK account, even one you don't own, counts too.
Do I need Form 8938 for my UK accounts and investments?#: Possibly, and it is a separate test from the FBAR. For a single filer living abroad Form 8938 starts at $200,000 in specified foreign financial assets at year end or $300,000 at any point; married filing jointly, $400,000 and $600,000. It reaches a broader class of assets than the FBAR — including a SIPP in some cases — so the two thresholds do not move together.
How is my SIPP or workplace pension treated for US tax?#: It depends on the arrangement, and classification comes before any treaty article applies. A SIPP is a defined-contribution personal pension; an employer's auto-enrolment workplace pension is typically occupational. Article 17 of the US–UK treaty addresses pensions, but whether contributions, growth and eventual withdrawals are currently taxable to the US, and what has to be reported, turns on how the specific arrangement is characterised.
Can UK income tax reduce my US tax through the Foreign Tax Credit?#: Generally yes. UK income tax withheld under PAYE on employment income is creditable on Form 1116, computed by income category and limited to the US tax on that category, and it usually exceeds the US tax on the same salary. Dividend and interest income inside an ISA is UK-tax-free, though, which means there is no UK tax to credit — the US liability on that income is not automatically zero just because the wrapper is.
Why does the UK's April-to-April tax year matter for my US return?#: The US return runs on the calendar year; the UK tax year runs 6 April to 5 April. A UK P60 or SA302 does not map onto a US calendar year without splitting the period, which matters for lining up PAYE withholding and any Foreign Tax Credit claim with the correct US tax year.
Can Americans in the UK use Streamlined procedures?#: Living in the UK neither qualifies nor disqualifies you. The Streamlined Foreign Offshore Procedures require non-willful conduct and the non-residency test — at least 330 days abroad in at least one of the last three years. A qualifying taxpayer files the most recent 3 years of returns and the most recent 6 years of FBARs with a 0% offshore penalty, certifying non-willfulness on Form 14653.
Does the US–UK totalization agreement affect my National Insurance or Social Security?#: It can. The agreement assigns social-security coverage to one country rather than both, documented by a certificate of coverage, so it governs where contributions are due for a worker moved between the US and UK. It does not by itself change how a pension benefit is taxed once received — that is governed separately by the income tax treaty.

Authorities cited

IRC §1297 — IRC §1297 — Definition of a passive foreign investment company
IRS Form 8621 — About Form 8621 — Information Return by a Shareholder of a PFIC or QEF
IRC §1291 — IRC §1291 — Interest on tax deferral (excess-distribution regime)
IRC §1296 — IRC §1296 — Mark-to-market election for marketable PFIC stock
FinCEN Form 114 (FBAR) — Report of Foreign Bank and Financial Accounts (FBAR)
31 CFR §1010.350 — 31 CFR §1010.350 — FBAR (FinCEN Form 114) filing requirement and $10,000 threshold
IRS Form 8938 — About Form 8938 — Statement of Specified Foreign Financial Assets
IRC §6038D — IRC §6038D — Information reporting of specified foreign financial assets (Form 8938)
IRS Form 1116 — About Form 1116 — Foreign Tax Credit (Individual, Estate, or Trust)
IRC §904 — IRC §904 — Limitation on the foreign tax credit
US–UK Income Tax Treaty — Convention between the United States and the United Kingdom (signed 2001) and the 2002 Protocol
U.S.–UK Totalization Agreement — U.S.–United Kingdom Social Security (Totalization) Agreement
IRS Streamlined Foreign Offshore Procedures — U.S. Taxpayers Residing Outside the United States — Streamlined Foreign Offshore Procedures

Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.

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