Your first year as an expat: what actually changes.
The first year abroad is the most complicated return you will ever file — part-year residence in two countries, income sourced across the move, and one-time elections that set the pattern for everything after.
The year splits, if you claim it
The UK's split-year rules can divide your first year so HMRC only taxes the resident part; the US dual-status rules do something similar in the other direction. Neither applies automatically, and both depend on facts — arrival dates, work patterns, home ties — that you should be recording from day one.
Miss the claim and both countries tax the full year, leaving the treaty to untangle what paperwork could have prevented.
- UK statutory residence test and split-year cases
- US dual-status returns for arrival years
- Day counts and records worth keeping from the start
- Record the move date and your day countsBoth residence tests turn on days, and both are far easier to evidence contemporaneously than to reconstruct two years later under enquiry. Keep arrival and departure dates from day one.
- Settle the UK residence position firstThe statutory residence test decides whether HMRC taxes your worldwide income or only the UK slice, and whether split-year treatment divides the year of the move. That answer feeds everything downstream.
- Decide exclusion or credits before the first US returnModel the Foreign Earned Income Exclusion against foreign tax credits on real numbers. Revoking the exclusion later locks you out of it for five years, so this is a decision rather than a default.
- Prepare the UK return, then the US oneUK figures firm up over the summer and feed the credits claimed on the US side. Preparing the US return first usually means amending it once the UK position settles.
- Add the disclosure forms the accounts triggerFBAR for non-US accounts, Form 8938 above its own thresholds, Form 8621 for any funds. None changes the tax owed; all of them carry penalties for silence.
First-year elections have long shadows
Choosing the Foreign Earned Income Exclusion versus foreign tax credits looks like a one-year decision; revoking the exclusion later locks you out for five. Pension contributions, ISA openings and fund purchases made innocently in month one can each create years of extra reporting.
The cheapest fix is sequencing: know what the first return will claim before the first pay cheque lands.
- FEIE versus foreign tax credit, modelled not guessed
- What not to open in your first month abroad
- Payroll withholding on both sides of the move
Last reviewed . Thresholds and rates change annually — check figures against the current tax year before relying on them.
In your first year right now?
A single scoping call before your first filings is the highest-leverage hour in cross-border tax. Fixed fee, both returns, one team.