The Expat Sage Podcast
Moving, Working, and Investing for Americans Abroad.
Pre-relocation planning advice and investment strategies for American citizens moving abroad.
Discover expert insights and comprehensive strategies for expats on investing in a dual taxation world, managing finances, and planning for retirement.
The Expat Sage Podcast
The UK Rewrote Tax For Newcomers, And Your First Four Years Could Define Your Financial Future
The UK recently rewired tax for global movers, and the clock starts the day you land. We unpack the Foreign Income and Gains regime, which replaces the non-dom concept with a hard four-year window during which foreign income and gains are exempt—no remittance gymnastics, no clean capital spreadsheets, and no offshore contortions. If you’ve been a non-UK resident for 10 straight tax years and arrive from April 2025, you can earn abroad and bring funds into the UK tax-free during your first four tax years, trading personal allowances for sweeping simplicity and real money.
We go step by step through the strategies that matter when seconds count. New arrivals can harvest gains on long-held foreign assets and immediately repurchase to step up basis, permanently pushing old appreciation outside the UK tax net before year five. Existing non-doms get a two-year bridge via the Temporary Repatriation Facility: a flat 12% to clean up mixed funds that once carried a 45% risk. And for U.S. citizens, there’s a standout move—Roth IRA conversions during the four-year window. By classifying the conversion as foreign pension income, the UK ignores it, while surplus U.S. foreign tax credits from your UK-taxed salary can wipe the U.S. bill, creating near-zero global tax conversions and locking in treaty-protected, tax-free growth.
Then we tackle the hard turn after the sprint. HMRC is shutting down the old lump-sum arbitrage on U.S. pensions, pushing you toward cleaner periodic withdrawals. More critically, inheritance tax flips from subjective domicile to a 10-year residence test, with a 40% charge on worldwide assets and a 10-year exit tail. The 1978 US‑UK Estate and Gift Tax Treaty may override the UK’s domestic reach if you re-establish U.S. domicile, but it demands careful evidence and timing. Our takeaway: plan front-loaded, act inside four years, and reassess before year ten. If this regime is a golden window with a trapdoor, your best defense is sequencing. Subscribe, share with a friend who’s UK-bound, and tell us the one move you’re prioritizing in year one.
More information about investing as a US citizen resident in the UK here. If you have questions, contact us.