High Net Worth
9 services, 8 core filings, US and UK
US and UK tax for people with larger portfolios, several homes or plans to move, give or expatriate, where one decision is taxed by both countries.
Who is the High Net Worth division for?
Wealth held across two tax systems is taxed by both, on different bases and in different years. We prepare the returns and advise on the decisions behind them: where to be resident, what to hold, when to give, and whether to keep US status at all.
Services in this division
- Private Client
Ongoing tax advice for wealthy families with US and UK ties, covering residence, investments, trusts, gifts and the estate position together.
- Tax Planning
Forward planning across the US and UK tax systems: timing income, choosing investments, arriving, leaving and organising family finances.
- International Tax
US reporting for owners of UK companies and partnerships, and for UK groups with US entities, including Forms 5471, 8858, 8865 and 5472.
- PFIC Reporting
Form 8621 reporting and elections for US persons holding UK funds, investment trusts and non-US ETFs, inside or outside an ISA.
- Treaty Relief
Claims under the US/UK income tax treaty, with Form 8833 disclosure, residence tie-breaker analysis and reduced withholding on US income.
- Expatriation
Tax planning and Form 8854 filing for people giving up US citizenship or a long-held green card, including covered expatriate testing.
- Gift Tax Returns
Form 709 for US donors and Form 3520 for US recipients of foreign gifts, with the UK inheritance tax position on the same transfer.
- Estate & Trust Planning
Wills, trusts and estate planning for families with US and UK connections, including foreign trust reporting and the inheritance tax position.
- Cross-Border Property
US and UK tax on homes and rental property held across the two countries, including sales, currency gains, FIRPTA and UK reporting.
Where larger balance sheets meet two systems
An investment portfolio built for a UK resident is rarely efficient for a US taxpayer.
UK and European funds are commonly passive foreign investment companies, reported fund by fund on Form 8621 and taxed under rules that penalise deferral. US-domiciled funds avoid that problem and can create a UK one if they lack reporting fund status. The net investment income tax of 3.8% sits on top. Foreign tax credits generally cannot offset it under domestic law, and treaty-based claims are contested.
The UK rules changed on 6 April 2025. The remittance basis has gone, replaced by a foreign income and gains regime that lasts four tax years for qualifying new arrivals. Inheritance tax now follows long-term residence: someone UK resident for ten of the previous twenty tax years has worldwide assets within its scope, at 40% above the available nil-rate bands. For a US citizen that exposure runs alongside US estate and gift tax, and the estate tax treaty between the two countries allocates taxing rights and credits.
Gifts and exits need particular care. Gifts to a spouse who is not a US citizen are free of US gift tax only up to $190,000 a year, against $19,000 for other recipients, and larger gifts go on Form 709. Giving up citizenship or a long-held green card brings the expatriation rules. Covered expatriate status turns on three tests: net worth of $2 million or more, average annual tax liability above $206,000, or failure to certify five years of compliance on Form 8854.
Decisions we are asked about
- 01
- Restructuring a UK portfolio that holds passive foreign investment companies
- 02
- Arriving in or leaving the UK under the residence rules in force since 2025
- 03
- Gifts between spouses where one is not a US citizen
- 04
- Renouncing US citizenship and the three covered expatriate tests
- 05
- Combined exposure to UK inheritance tax and US estate tax
The forms this division files
Most of the work sits in a handful of returns and information forms. These are the ones we prepare most often for this group.
- Form 8854Initial and Annual Expatriation Statement
- Form 709United States Gift Tax Return
- Form 3520Foreign Trusts and Receipt of Certain Foreign Gifts
- TreatyThe US-UK Income Tax Treaty
Why US UK Tax Returns
The same people keep the file year after year, so elections, carryovers and treaty positions follow you from one return to the next.
One File
US and UK returns prepared in the same engagement and reconciled line by line.
Primary Sources
Every position traced to the Code, the treaty, IRS instructions or HMRC guidance.
Scope First
Returns, forms, years and fee agreed in writing before work begins.
The Same People
The team that files this year carries the elections and credits into the next.
Questions we are asked
Can I use UK tax to offset the net investment income tax?
The 3.8% net investment income tax is generally not creditable under domestic law, and treaty-based claims are contested. In practice that means a US citizen in the UK can pay full UK tax on investment income and still face this charge in the US. Some taxpayers file a treaty-based position with disclosure on Form 8833. Whether that is appropriate depends on the amounts involved and your appetite for a dispute.
I am thinking of renouncing my US citizenship. Will I pay an exit tax?
Only covered expatriates are subject to the mark-to-market charge. You are covered if your net worth is $2 million or more, if your average annual US tax over the prior five years exceeds $206,000, or if you cannot certify five years of compliance on Form 8854. Failing the certification alone is enough. Covered expatriates exclude the first $890,000 of deemed gain. Narrow exceptions exist for certain dual citizens from birth and minors.
I moved to the UK recently. Does the new foreign income and gains regime help an American?
It can, within limits. Someone who was not UK resident in any of the previous ten tax years can claim UK relief on foreign income and gains for four tax years. The US still taxes that income, and because no UK tax is paid on it there is no credit to set against the US charge. The saving is the gap between UK and US rates, and the claim costs UK allowances for the year.
My wife is British. Can I transfer assets to her without US gift tax?
Not without limit. Gifts to a spouse who is not a US citizen do not qualify for the unlimited marital deduction. The annual exclusion for such gifts is $190,000, and amounts above it are reported on Form 709 and use part of your lifetime exclusion, currently $13.99 million. UK inheritance tax has its own spouse rules, which can be restricted where only one spouse is a long-term UK resident, so both sides need checking first.
Do I need to report UK investment accounts that produce very little income?
Reporting follows value, not income. The FBAR is required once all foreign accounts together exceed $10,000 at any time in the year. Form 8938 applies to a filer living abroad, not filing jointly, when specified foreign financial assets exceed $200,000 at year end or $300,000 at any time. Funds held in those accounts may each need a Form 8621 as well. An account with no income can still carry all three obligations.
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