Americans living in the UK need to be aware of the changing tax landscape in both countries. With the UK abolishing the non-dom regime in April 2025 and uncertainty around the US Estate Tax exemption expiring in December 2025, it is essential for US citizens to understand how these changes will impact them.
For those who have not been in the UK long enough to qualify as long-term residents under the new UK Inheritance Tax rules, leaving the UK permanently before becoming a long-term resident could have tax benefits. If the US Estate Tax exemption is extended or abolished, they may only need to worry about UK Inheritance Tax on their UK assets.
US citizens who will be long-term residents under the new UK rules should start considering how UK and US taxes will interact. If they were close to hitting the threshold for deemed domicile under the old UK rules, they should have already begun planning for the changes. For those already deemed domiciled, the impact of the Estate Tax exemption extension or abolition may be minimal if they plan to stay in the UK.
Since there is no one-size-fits-all approach to this situation, it is crucial for US citizens who are long-term residents of the UK to seek professional advice to understand their specific position. This is especially important for US citizens whose spouses are not US citizens. Reviewing wills to ensure they are suitable for the two-tax regime that will apply at death is also recommended.
It is essential for Americans in the UK to stay informed about these tax changes and seek guidance to navigate the complexities of the evolving tax landscape in both countries. Planning ahead and understanding the implications of these changes will help individuals make informed decisions to protect their assets and minimize tax liabilities.
