US-UK Tax Talk

Hosted by Collyer Bristow LLP

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Jun 2026

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Welcome to US-UK Tax Talk, brought to you by Collyer Bristow. Hosted by Aidan Grant, a Partner in our Tax & Estate Planning team, this series explores the complex world of cross-border tax and estate planning. Aidan specialises in advising high-net-worth individuals with UK-US interests, including mixed-domicile marriages, UK-resident US citizens, and beneficiaries of US trusts. Named in Citywealth’s Top 100 Future Leaders , he brings expert insight and practical advice to every episode. Join us as we engage with leading professionals across the UK and US, covering everything from wills and trusts to charity tax, and moving to the UK. Expect straight-talking discussions on English tax law - always with a US perspective. Subscribe now and stay informed on the latest in UK-US tax and estate planning. For expert advice tailored to your needs, visit collyerbristow.com . Disclaimer: This content is provided for general information only and does not constitute legal or other professional advice. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information contained in this material.

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June 3, 2026Episode 1450 min

Private Equity Explained: From Deal Structure to Exit

In this episode of US-UK Tax Talk, Aidan Grant is joined by Collyer Bristow partner Ragavan Arunachalam, Head of Private Equity, to explore the world of private equity, corporate acquisitions and dealmaking.Aidan and Ragavan discuss what private equity is, how it differs from venture capital, and why private equity investors are increasingly looking to the UK market. They explain how deals are structured, the role of debt and equity financing, and why management teams are often just as important as the capital being invested.The conversation also takes listeners through the lifecycle of a private equity transaction, covering heads of terms, due diligence, disclosure, deal documentation and completion. Along the way, Ragavan shares insights from more than 20 years of dealmaking experience and explains why successful transactions are often built on alignment, preparation and strong relationships.Come back for new episodes of US-UK Tax Talk released on the first Wednesday of every month.For questions or feedback, please contact us:🔗 Aidan Grant – Partner, Collyer Bristow https://collyerbristow.com/people-listing/aidan-grant/🔗 Ragavan Arunachalam – Partner, Collyer Bristow https://collyerbristow.com/people-listing/ragavan-arunachalam/🔗 Collyer Bristow https://collyerbristow.com/🎧 Listen on the go https://podcasts.apple.com/gb/podcast/us-uk-tax-talk/id1570411216Key TakeawaysWhat is private equity and how does it differ from venture capital?Private equity generally involves investing in established, revenue-generating private companies, whereas venture capital is typically focused on earlier-stage businesses seeking capital to develop products, gain market traction or accelerate growth.Why are private equity investors increasingly attracted to UK businesses?Many investors see the UK as offering attractive valuations compared to other markets. This can allow capital to go further and create opportunities to acquire strong businesses with significant growth potential.Why do private equity firms use debt financing as part of acquisitions?Debt financing allows investors to leverage their capital and diversify risk across multiple investments. By combining debt and equity, investors can acquire larger businesses while preserving capital for other opportunities.What does due diligence involve in a private equity transaction?Due diligence is the process of investigating a target company’s legal, financial, commercial and operational position. It helps buyers identify risks, validate assumptions and understand how value can be created after the acquisition.What is the purpose of disclosure in a company sale?Disclosure allows sellers to identify exceptions to the warranties they give in the sale agreement. By providing buyers with complete information about known issues, disclosure helps allocate risk appropriately and reduce the likelihood of disputes after completion.Why is alignment between investors and management so important?Successful private equity transactions often depend on aligning the interests of investors, management teams and sellers. Equity participation and performance incentives can ensure everyone is working towards the same long-term objectives and eventual exit strategy.

May 6, 2026Episode 131 hr 2 min

How to Purchase UK Property as a Foreign Investor

In this episode of US-UK Tax Talk, Aidan Grant is joined by Collyer Bristow colleague, Nick Mann, to help listeners understand the UK conveyancing process when buying or selling residential property.Aidan and Nick walk through the main stages of buying a UK residential property. They cover offers and acceptance, freehold and leasehold ownership, searches and due diligence, and exchange and completion. They discuss why international buyers can find the UK process unfamiliar, particularly because the transaction is not legally binding until exchange.Come back for new episodes of US-UK Tax Talk released on the first Wednesday of every month.For questions or feedback, please contact us:🔗 Aidan Grant – Partner, Collyer Bristow https://collyerbristow.com/people-listing/aidan-grant/🔗 Nick Mann – Partner, Collyer Bristowhttps://collyerbristow.com/people-listing/nick-mann/🔗 Collyer Bristow https://collyerbristow.com/🎧 Listen on the go https://podcasts.apple.com/gb/podcast/us-uk-tax-talk/id1570411216Key Take AwaysWhen does a UK property purchase actually become legally binding? An accepted offer is not legally binding in the UK and either party can still withdraw. The transaction only becomes binding at exchange, when contracts are signed, the deposit is paid, and the completion date is agreed.Why is it important to involve a solicitor early in the process? Early engagement helps identify risks, manage expectations on timing, and flag issues before costs escalate. It also allows buyers to understand restrictions, financing requirements, and whether the property meets their intended use.What is the practical difference between freehold and leasehold ownership? Freehold typically means owning both the property and the land, with greater control over what you can do with it. Leasehold usually applies to flats and involves a landlord relationship, ongoing costs like service charges, and restrictions on alterations and use.What does due diligence actually involve for a buyer? The solicitor reviews title documents, raises enquiries, and carries out searches such as local authority and environmental checks. This process highlights risks like planning issues, service charge liabilities, restrictions on use, or potential future costs.Why can the timing of a transaction be unpredictable? Factors such as property chains, mortgage approvals, search delays, and third-party responses can all affect progress. Buyers can only control their own readiness, so being organised and proactive helps reduce the risk of delays before exchange.

April 1, 2026Episode 1157 min

New 2025 UK Tax Changes: What Americans Need to Know

In this episode of US-UK Tax Talk, Aidan Grant does things a little differently and becomes a guest on his own show. He is joined by Nathan Prior and Kat Smilewicz of Partners Wealth Management, with Nathan stepping in as guest host, to discuss what the UK’s 2025 tax changes mean in practice for Americans moving to the UK and for British expats returning home.Together, they walk through the key issues that arise before and after a move to the UK. They cover UK tax residence, the new Foreign Income and Gains (FIG) regime, pre-arrival planning for trusts, companies and investment portfolios, and the opportunities and risks created by the Temporary Repatriation Facility. They also discuss why timing matters so much, why apparently simple money movements can create unexpected tax exposure, and why coordinated UK and US advice is often the difference between efficient planning and an expensive mistake.Come back for new episodes of US-UK Tax Talk released on the first Wednesday of every month.For questions or feedback, please contact us:🔗 Aidan Grant – Partner, Tax & Estate Planninghttps://collyerbristow.com/people-listing/aidan-grant/🔗 Kat Smilewicz – Partners Wealth ManagementKat Smilewicz - Partners Wealth Management🔗 Nathan Prior – Partners Wealth ManagementNathan Prior - Partners Wealth Management🔗 Collyer Bristow – Tax & Estate Planning Teamhttps://collyerbristow.com/🎧 Listen on the gohttps://podcasts.apple.com/gb/podcast/us-uk-tax-talk/id1570411216Key Take AwaysWhen do I actually become UK tax resident, and why does the start date matter so much?UK tax residence is determined tax year by tax year under the Statutory Residence Test. That means if you trigger UK residence part way through a tax year, you can be treated as resident from 6 April unless split-year treatment applies. That start date matters because it can bring forward UK tax exposure and can also shorten the period during which you benefit from the new FIG regime.What is the FIG regime, and who can benefit from it?The Foreign Income and Gains regime was introduced from April 2025 and can give qualifying new arrivals a four-year exemption from UK tax on foreign income and gains. It is available not only to non-UK nationals but also to returning British expats, provided they have not been UK resident for four of the previous ten tax years. The rules are more objective than the old domicile regime, but the timing of arrival is critical because the four years run from the tax year of first UK residence.What are the biggest traps people miss when bringing money into the UK?A recurring theme is that US and UK tax rules often do not line up, even when the arrangements sound familiar. Money coming from a revocable living trust, an LLC, a parental loan, or the sale of US assets can have very different UK consequences from the US treatment people expect. That is especially important where someone is bringing funds to the UK to buy a home, because the source and route of the money can affect both immediate tax costs and longer-term inheritance tax exposure.

March 4, 2026Episode 1148 min

US Immigration: The Green Card Myth

In this episode of US-UK Tax Talk, Aidan Grant is joined by Catherine Betancourt, a US immigration specialist at Flynn Hodkinson, to answer the practical questions people actually ask when planning a move to the United States.Aidan and Catherine walk through the typical US immigration journey from visas, to green cards, to citizenship. They cover what is realistic, what is commonly misunderstood, and where people get caught out. They discuss why work-based immigration often depends on having an overseas connection, why the H-1B is uniquely unpredictable, how family sponsorship works in practice, and why green card travel rules can become a major risk for UK-based lifestyles.Come back for new episodes of US-UK Tax Talk released on the first Wednesday of every month.For questions or feedback, please contact us:🔗 Aidan Grant – Partner, Tax & Estate Planninghttps://collyerbristow.com/people-listing/aidan-grant/🔗 Collyer Bristow – Tax & Estate Planning Teamhttps://collyerbristow.com/🎧 Listen on the gohttps://podcasts.apple.com/gb/podcast/us-uk-tax-talk/id1570411216Key Take AwaysWhat are the main ways to move to the US if you’re not a US citizen? For most people it comes down to two routes: work or family. There is not, in the way people often assume, a simple “invest money and you get a visa” pathway. If you are not being sponsored through work or a qualifying family relationship, options narrow quickly.I’m a US employer (or I’ve got a US job offer). Why is it still so hard to get a visa? If the employer is US-only with no overseas footprint, the available visa routes can be surprisingly limited. Many common work routes are designed around a connection abroad, such as transfers. Without that link you are often pushed into more restrictive categories unless you qualify under something like “extraordinary ability.”Everyone mentions the H-1B. Is it actually a lottery and can you increase your chances? Yes. The H-1B begins with a genuine random selection lottery, and selection still does not guarantee approval. You also cannot “flood” the process with duplicates. It is one entry per applicant and duplicates can be disqualified, so it is not a reliable hiring strategy.If H-1B is uncertain, what are the realistic alternatives people actually use? Two of the most practical routes discussed are the L-1, moving someone from an overseas office to the US, and the E-2, a treaty-based business route that can work for UK nationals. Both can be effective, but both are highly fact-specific. The E-2 in particular can turn on ownership and nationality tracing.Once I have a green card, can I live outside the US and still keep it? This is where the rules tighten. Travel patterns can trigger scrutiny. Around six months abroad can lead to questioning at the border, and 12 months or more can be treated as evidence you have abandoned permanent residence. If extended time outside the US is likely, planning ahead and considering a re-entry strategy matters.

February 4, 2026Episode 1058 min

American Living In The UK? Estate planning traps to watch out for

In this episode of US-UK Tax Talk, Aidan Grant, Partner in the Tax & Estate Planning team at Collyer Bristow, answers common listener questions on estate planning for Americans living in the UK.From wills and probate to living trusts, inheritance tax, family gifting, property ownership, and powers of attorney, Aidan explains when estate planning can stay simple, where cross-border complexity genuinely arises, and how US citizens in the UK can approach planning decisions with confidence.Come back for new episodes of US-UK Tax Talk released on the first Wednesday of every month.For questions or feedback, please contact us:🔗 Aidan Grant – Partner, Tax & Estate Planninghttps://collyerbristow.com/people-listing/aidan-grant/🔗 Collyer Bristow – Tax & Estate Planning Team https://collyerbristow.com/🎧 Listen on the gohttps://podcasts.apple.com/gb/podcast/us-uk-tax-talk/id1570411216What’s Covered? Does my estate planning have to be complex just because I’m an American living in the UK? Being subject to two tax systems does not automatically mean your estate plan needs to be complicated. Simple objectives can often be met with simple planning.I’m an American living in the UK with assets in both countries. Do I need a will in both jurisdictions? There is no fixed rule. The right approach depends on probate timing, cost, and administrative efficiency.A US attorney has recommended a living trust to avoid US probate, should I do that? US living trusts can be effective but are not always the right solution for UK-resident Americans and may create UK tax issues if used incorrectly.My estate planning wishes are simple, but I’m worried about UK inheritance tax, what can I do? Inheritance tax exposure can often be managed without over-engineering, but cross-border alignment is essential.My parents live in the US and want to make lifetime gifts to me. Are there UK tax issues? Yes. UK tax consequences can arise for UK-resident recipients even when gifts are made by US-based parents. My parents are redoing their US estate planning. Does my UK residence matter? Yes. The residence and tax position of beneficiaries can materially affect how US estate planning works in practice. My spouse and I are buying a home in the UK. I’m American, but my spouse isn’t, should we think about ownership? Property ownership structure can have significant estate planning and tax implications for mixed-nationality couples.Should I put powers of attorney in place in both the US and the UK? Powers of attorney are jurisdiction-specific and often need to be put in place separately to be effective.I know I need advice, but who do I actually need - a lawyer, accountant, or financial adviser? Cross-border estate planning usually requires coordinated advice, and knowing who to involve is key.

January 7, 2026Episode 950 min

UK Tax Audits and Investigations: How to Deal with HMRC

In this episode of US-UK Tax Talk, host Aidan Grant is joined by James Austen, Partner, and Henry Lopes, Associate in the Tax & Estate Planning team at Collyer Bristow, for a practical and candid discussion on HMRC inquiries, tax disputes, and what taxpayers should do when things go wrong.Drawing on extensive experience in both tax advisory and litigation, James and Henry explain how HMRC inquiries arise, the different forms of non-compliance, and why cross-border taxpayers, particularly Americans living in the UK, are disproportionately exposed to investigation risk. The conversation explores how misunderstandings between the US and UK tax systems, especially around entities like LLCs and US trusts, often lead well-intentioned taxpayers into non-compliance.Join us on the first Wednesday of every month for a new episode of the US-UK Tax Talk podcast, brought to you by Collyer Bristow. Watch recent episodes on Collyer Bristow’s YouTube channel, and connect with our Tax & Estate Planning team.Key Take AwaysNon-Compliance Takes Many FormsUK tax non-compliance is not limited to deliberate wrongdoing. It can include filing late, filing incorrectly, paying tax in the wrong country, or failing to disclose income due to misunderstandings between tax systems. Many US-UK issues arise despite good intentions.Cross-Border Taxpayers Face Higher RiskAmericans in the UK often remain fully compliant with the IRS while unintentionally failing UK obligations. Structures like US LLCs and living trusts are common sources of inquiry because the UK frequently taxes them differently from the US.Seek Advice ImmediatelyOnce a taxpayer becomes aware of potential non-compliance, the clock starts ticking. HMRC may treat delays of as little as 3-6 months as careless conduct, increasing penalties. Prompt professional advice is critical.Going to HMRC First MattersUnprompted voluntary disclosure significantly reduces penalties. If HMRC contacts the taxpayer first, penalties can rise dramatically, in some cases up to 100% or more of the tax due.Disclosure Facilities Are Procedural, Not LenientThe Worldwide Disclosure Facility and Digital Disclosure Facility provide a method to disclose errors, but they do not offer penalty amnesties. Taxpayers typically have 90 days to prepare full disclosures, which is often much tighter than expected.Penalties Depend on BehaviourPenalties are driven by culpability: innocent error, carelessness, or deliberate conduct. Demonstrating cooperation, transparency, and prompt disclosure can substantially reduce penalty exposure.Litigation Is a Last ResortMost disputes settle through correspondence. Tribunal litigation is expensive, time-consuming, and uncertain. Even successful taxpayers usually cannot recover legal costs at First-tier Tribunal level.Record-Keeping Is EssentialTaxpayers may need to defend returns going back up to 20 years in serious cases. Maintaining accurate, long-term records is crucial, even when issues arise decades later.Don’t Panic - but Don’t Ignore ItDisagreements with HMRC are common in a complex tax system. With proper advice and a structured approach, even serious issues are usually manageable and less catastrophic than feared.

December 3, 2025Episode 853 min

The Anson Case and How the UK Really Taxes LLCs with James Austen and Henry Lopes

In this episode of US-UK Tax Talk, host Aidan Grant is joined by colleagues James Austen, Partner, and Henry Lopes, Associate in the Tax & Estate Planning team at Collyer Bristow, for a deep and detailed exploration of one of the most challenging areas of US-UK personal taxation: how the UK treats US Limited Liability Companies (LLCs) and why this continues to create double, and sometimes triple, taxation for American taxpayers living in the UK.While LLCs are a common planning tool in the United States and are generally treated as tax-transparent, the UK often takes the opposite approach, treating them as opaque corporate entities. This mismatch leads to substantial tax exposure for UK-resident members. Aidan, James, and Henry walk listeners through the legal characterisation issues, the risk of UK corporation tax, the complexities of the Anson Supreme Court case, and HMRC’s increasingly aggressive stance in the years since.Americans living in the UK face one of the most complex cross-border tax environments in the world, and when an LLC enters the picture, that complexity multiplies. Together, the team break down how differing legal systems, conflicting tax treatments, and HMRC’s updated 2023 guidance collide to create one of the most problematic issues in the US-UK tax world.Join us on the first Wednesday of every month for a new episode of the US-UK Tax Talk podcast, brought to you by Collyer Bristow. Watch recent episodes on Collyer Bristow’s YouTube channel, and connect with our Tax & Estate Planning team.Key Take Aways:Understanding the US-UK LLC Mismatch:In the US, LLCs are generally treated as tax-transparent, with profits flowing directly to their members. The UK, however, often treats LLCs as opaque corporate bodies, taxing the entity rather than the individual. This creates a fundamental mismatch, meaning income taxed once in the US may be taxed again in the UK without relief.Why Characterisation Matters:The UK must decide how to classify foreign entities that don’t have clear UK equivalents. LLCs sit at the centre of this problem. HMRC frequently argues that LLC income belongs first to the company, not the member, leading to double taxation regardless of how the US treats the same income. This characterisation question is central to every LLC case.Why Anson Doesn’t “Fix” the Problem:The 2015 Anson v HMRC Supreme Court case initially appeared to resolve the issue in favour of transparency. However, HMRC now argues that Anson was decided on narrow findings of fact and does not apply broadly. Updated 2023 guidance makes clear that HMRC considers most LLCs to be opaque, and the department is openly seeking a new “Anson 2” case to challenge taxpayers.Legal Analysis Is Essential:Successful reliance on Anson requires a two-part legal analysis:State Law Review: Does the LLC’s governing state law allocate profits directly to the members?Operating Agreement Review: Do the specific terms mimic transparency or suggest corporate-style decision-making? Even small wording differences in an operating agreement can fundamentally change the tax outcome.Plan Before You File:Taxpayers are far better protected when they seek advice before filing their UK return. Legal opinions, proper documentation, and clear disclosure place taxpayers in the strongest possible position against HMRC challenges. Those who delay often face higher costs, greater risk, and the possibility of becoming HMRC’s next test case.

November 5, 2025Episode 759 min

Investing for Children in the US UK Space with Patrick Mulhern

In this episode of US-UK Tax Talk, host Aidan Grant welcomes back Patrick Mulhern, Partner at Tanager Wealth Management, for a deep dive into one of the most nuanced areas of cross border financial planning, investing for children where Americans are involved. Patrick first appeared on the show four years ago, and this return conversation explores how US and UK tax systems collide when parents and grandparents try to save and invest for minors.Americans living in the UK face a uniquely complex set of rules when planning their finances and when children enter the picture, those complexities multiply. Together, Aidan and Patrick break down how citizenship based taxation, mismatched reliefs between HMRC and the IRS.Investing for children is never simple and in the US-UK cross border context, every decision can carry long term consequences. Patrick and Aidan stress that parents should plan early, seek qualified advice, and choose simplicity and flexibility over aggressive tax optimization. In the end, a well structured plan not only protects wealth but gives families the peace of mind to focus on what really matters.Join us on the first Wednesday of every month for a new episode of the US-UK Tax Talk podcast, brought to you by Collyer Bristow. Watch recent episodes on Collyer Bristow’s YouTube channel, and connect with Tanager Wealth Management.Key Take AwaysUS-UK Wealth Management Basics: Americans resident in the UK must navigate two tax systems simultaneously. Products that are tax advantaged in one jurisdiction, like ISAs or US mutual funds, can create taxable events in the other. Proper wealth management means identifying compliant structures that satisfy both HMRC and the IRS, not just one.Why Children Make It Harder: Introducing minors complicates ownership, control, and reporting. Even when accounts are set up for a child’s benefit, the IRS may view them as foreign trusts, demanding disclosure and potential penalties. The UK, conversely, often sees such structures as simple nominee arrangements, leading to conflicting interpretations.The Junior ISA Problem: For British families, a Junior ISA is the natural choice for tax free growth, accessible at 18. But for a US citizen child, the IRS ignores that UK tax relief and treats the underlying funds as PFICs (Passive Foreign Investment Companies), taxed at punitive rates. Worse, Junior ISAs are locked until age 18, meaning parents can’t unwind them once they realise the problem.Safer US Options: UTMAs and UGMAs: US custodial accounts like UTMAs offer a simpler, more flexible alternative. They lack the tax free benefits of ISAs but avoid the cross border penalties. However, UK practitioners must determine whether these qualify as bear trusts or more substantive trust structures, a crucial legal distinction for UK tax treatment.The 529 Plan Dilemma: The 529 education savings plan is a favourite among American families, offering tax free growth if used for qualified education costs. But in the UK, it’s often seen as a foreign trust, with unclear or adverse tax consequences. While US grandparents can use these plans for UK based grandchildren, British resident parents are generally better off avoiding new contributions.Planning Comes First: The best results come from early, coordinated advice between cross border advisors, tax specialists, and wealth managers. Families who wait until after moving to the UK or after funding children’s accounts often find themselves facing unnecessary tax exposure and expensive clean-up.

October 1, 2025Episode 648 min

Living in America as a Brit: Opportunities, Pitfalls & Planning First with Richard Taylor

Welcome to US–UK Tax Talk. Host Aidan Grant is joined by Richard Taylor, founder of Plan First Wealth and host of We’re the Brits in America. Richard shares his personal journey from Manchester to Dubai to the US, and his professional insights as a financial advisor working almost exclusively with British expats in America. Together, they explore what moving to the US really looks like, beyond the clichés, and how to avoid costly financial missteps.This episode takes a hard look at the financial side of that journey. Richard and Aidan discuss why pre-arrival planning is essential, how unsuspecting expats fall into traps like punitive taxation on ISAs and PFICs, and why failing to meet reporting obligations such as FBAR and FATCA can create problems that snowball over time. They explore how the American tax system, complex, unforgiving, and layered with state-level rules, catches out even seasoned professionals who assume their UK experience will translate.The conversation also dives into the longer-term questions that many expats face: Should I take a green card? Should I become a US citizen? Richard warns that these decisions, often made without full understanding, carry lifelong consequences, including ongoing citizenship-based taxation and the risk of exit taxes. Through personal stories and professional insights, he paints a vivid picture of the opportunities and landmines that define British life in America.Key Take AwaysThe Expat MindsetBrits who move to the US typically do so for career and financial opportunities, not lifestyle. The country’s diversity means no two moves are alike, but the unifying factor is ambition: expats arrive determined to “make it” in America. That mindset shapes the financial planning needed to maximise the opportunity.Expectations vs. RealitySettling in takes longer than expected. From housing to cultural differences, most expats underestimate the adjustment period. What begins as a planned two-year stay often stretches into decades, with major financial consequences if planning is deferred.Pre-Arrival PlanningThe most common pitfall is failing to prepare before arrival. ISAs, pensions, and general investment accounts often become PFICs once in the US, leading to punitive taxation and onerous reporting. Moving portfolios into PFIC-free structures before relocating can save tens of thousands.Reporting & ComplianceMany new arrivals believe “no tax due” means “no reporting required.” In fact, FBAR and FATCA require disclosure of non-US assets regardless of tax owed, with penalties starting at $10,000 per year. Missed filings, SIP treatment, and trust issues are recurring traps that can leave returns open indefinitely to IRS scrutiny.Green Cards, Citizenship & Exit TaxToo many Brits drift from visa to green card to citizenship without understanding the consequences. The US is one of the only countries taxing citizens worldwide for life. Exiting later can trigger the covered expatriate regime with harsh exit taxes and even a 40% transfer tax on gifts to US family members. Careful thought is required before locking in a status that may follow you forever.New episodes release on the first Wednesday of every month. Like, follow, and subscribe so you never miss one. Watch the video version on Collyer Bristow’s YouTube channel. To learn more, connect with Richard Taylor via PlanFirstWealth.com, LinkedIn, or his podcast We’re the Brits in America.

September 3, 2025Episode 552 min

US Tax Residency Demystified: Citizens, Green Cards & the Substantial Presence Test with Alicea Castellanos

In this month’s episode, Aidan Grant is joined by Alicea Castellanos, Founder and CEO of Global Taxes LLC, to explore the complexities of US tax residency — including how individuals can unintentionally become tax residents and what this means for their global income, reporting obligations, and cross-border lifestyle.From citizenship and green card status to the Substantial Presence Test, Alicea explains the different ways residency can be triggered and why it is so often misunderstood. We discuss how tax residency differs from immigration status, the potential pitfalls of failing to plan ahead, and the increasing compliance burden on those living and working between the US and UK.Alicea sheds light on when US tax residency begins and ends, the nuances of first-year exemptions, and how certain visas, such as the F-1 student visa, can temporarily delay residency status. We explore the far-reaching consequences of becoming a tax resident, from worldwide income reporting and FATCA disclosures to the challenges of managing both federal and state-level residency rules.The conversation also delves into the complexities of exiting residency and the formal processes required to surrender a green card or citizenship, including the risk of triggering an exit tax. For those living between the US and UK, Alicea highlights how the tax treaty can help resolve dual residency, while emphasising the importance of early planning to avoid costly mistakes.Whether you are arriving in the US, preparing to leave, or dividing your time between jurisdictions, this episode offers clear, practical insights to help you navigate the rules and plan with confidence.Join us on the first Wednesday of every month for a new episode of the US-UK Tax Talk podcast, brought to you by Collyer Bristow.Key TakeawaysPaths to Residency: US tax residency is triggered by three routes: citizenship, green card status, or the Substantial Presence Test. Citizens are always tax residents worldwide, green card holders remain residents until they formally surrender the card, and the SPT counts days across a three-year period, with 183 days as the threshold.First-Year and Visa Nuances: Arriving with no prior US days and staying under 183 generally avoids residency in the first year. Certain visas, such as the F-1 student visa, exempt days temporarily, but this protection has limits. Short trips under 10 days may also be excluded when calculating start dates.Consequences of Residency: Once resident, individuals are taxed on worldwide income from day one. Filing is mandatory even if credits or deductions reduce liability. FBAR and FATCA reporting add further compliance, and FATCA rules often complicate opening or maintaining non-US bank accounts.State-Level Complexity: Federal residency is only part of the story. States like New York and California apply aggressive residency audits, while others such as Florida and Texas impose no income tax. Demonstrating departure from a state typically requires clear proof, such as leases or employment records.Exiting Residency: Giving up residency is rarely simple. While reducing day counts may end SPT residency, surrendering a green card or citizenship involves formal processes and may trigger exit tax. Long-term green card holders are especially at risk of being treated as covered expatriates.Dual Residency and the Treaty: It is possible to be a tax resident of both the US and the UK. In these cases, the treaty offers tiebreaker rules to determine residency, but claiming them requires paperwork and is based on subjective judgments. Avoiding dual residency through advance planning is almost always preferable.