The number of US citizens looking for advice in the UK is growing, but not every adviser is qualified to take them on.
Thomas Quinn, managing director at specialist advice firm David James Wealth USA, cautions advisers to consider whether they have the knowledge to advise US clients, as they could end up falling foul of intricate tax laws.
“Unless you understand US tax, the US/UK treaty, and the traps around double taxation, you probably shouldn’t be advising,” he told FT Adviser.
This comes as Americans are applying for UK citizenship in record numbers, according to a report in our sister publication the Financial Times.
In this Q&A Quinn explains some of the concerns and what to look out for when being approached by a person who has a US tax-filing obligation.
FTA: Data shows UK citizenship applications from US nationals are reaching new highs under the Trump presidency. Have you seen more Americans reach out?
TQ: Yes. Its anecdotal and a small sample size but we’ve had more UK inbound conversations from American clients in the past 12 months than I’ve had in 10-plus years of advising US/UK people.
FTA: What are they looking for?
TQ: Generally, two things. First, somewhere that feels culturally familiar. For many, that’s the UK. It’s English-speaking, legally aligned, great schools, and often feels like a natural extension of their world.
Second, a safe place to hold and invest their money, somewhere with strong rule of law, stable banking, and a clear regulatory system.
FTA: What are the risks in relocating from the US from a wealth perspective?
TQ: The biggest issue is that financial plans built for one system often come undone in the other.
We see it all the time, clients have great US-based financial plans and investments, but once they move to the UK, HMRC treats those same assets very differently. That might mean unexpected tax on things like trusts or investment gains.
It’s not that the original plan was bad, it’s just that no one thought about what happens when the tax rules change on the individuals that own or are attached to it.
FTA: What do you typically advise them to do?
TQ: It really depends: is the client moving their cash, or themselves, or both? Each version leads to different solutions, and different jurisdictions.
If both the person and the money are moving to the UK, then opening a UK investment account might seem logical, but it could actually backfire. That move may disqualify them from using the UK’s new Fig regime, which gives tax relief on offshore income and gains for the first four years of UK residency.
So instead of going straight to the UK, we might look at setting up the account in a third-country jurisdiction, somewhere that works for both US tax reporting and UK tax planning. It’s small details like that which make all the difference.
FTA: What should UK IFAs consider if they are being approached by US clients?
TQ: Be careful. Just because someone lives here and speaks English doesn’t mean they’re under UK-only rules.
If they have a US passport, green card, or even just a US tax-filing obligation, then you’re dealing with two tax systems, and most standard UK advice doesn’t always translate well.
Isas, UK OEICs, even standard ETFs can trigger painful tax consequences in the US. And the reverse is true too: plenty of US investment structures don’t work well under UK tax rules.
Proper advice means understanding both sides, and crucially, the third piece: how assets from one system are treated in the other.
It’s not enough to know what a 401(k), brokerage account, or living trust is — you need to know how each of those is treated when the client is in a different jurisdiction.
For clarity, the US taxes its citizens and green card holders no matter where they live.
So unless you understand US tax, the US/UK treaty, and the traps around double taxation, you probably shouldn’t be advising.
Then there are other financial planning nuances like exit tax when someone gives up their green card or US passport, US citizen children attached to UK trusts, etc.
FTA: Do you predict the exodus to continue?
TQ: Yes, for now. We’re not expecting a full-scale exodus from the US, but the profile of the American client is shifting.
They’re globally minded, more mobile, and some are increasingly uneasy about life right now.
Will we still be having these conversations in four years? Maybe, maybe not.
But while the UK offers that four-year tax break for new arrivals, it’s definitely on the radar for a growing number of Americans.
carmen.reichman@ft.com