American celebrities arriving on British shores and setting up home have captured media attention in the past year, many driven to escape their native land by the second presidency of Donald Trump.
Those headlines have, seemingly, prompted a growing number of ordinary Americans to follow suit and decamp to the United Kingdom. The US president is not the only reason, as some say they made the move for lifestyle and also financial reasons, especially what they see as UK property being a sounder investment compared to the US.
With this influx, experts are warning that Americans establishing themselves in England and perhaps elsewhere in the UK should be aware of legal, financial and also tax implications of their move. The risks might not be evident at the outset, they caution, and that could land them in a heap of costly trouble.
‘Easy’ Move to the UK
Some high-profile Americans, like Ellen DeGeneres and wife Portia de Rossi, have made a beeline for the Cotswolds, in the English West Midlands, hoping for respite from the political maelstrom back home.
“For Americans looking for a fresh start, the Cotswolds is increasingly top of the list,” says The Cotswold Letting Agency, which rents properties in what it calls a “quintessential British” part of the UK. Director Fergus Mitchell says the region also matches Americans’ desires because of the space it affords them — something they might not get in British cities, including the capital.
“US relocators are often used to space and comfort, and the Cotswolds delivers that alongside character and setting,” he said.
“Many American clients will start with a short-let while they get to know the area, testing which villages suit them, where schools are and, importantly, how they want to live, before committing to a longer tenancy or purchase.”
This way, said Mitchell, Americans benefit from a “gentler route into the UK property market”.
Underestimating the Move Across the Pond
Even if Americans moving to Britain do factor in the legal and other risks, many don’t fully take them into account. That’s the experience of Daniel Cabrera, who owns Sell My House Fast, a property agency in San Antonio, Texas.
“US buyers of UK property are attracted by the currency dynamics and relative value, which stretch their purchasing power. However, taxes, fees and timing risks are underestimated,” he said.
Cabrera said the main financial attractions for Americans looking to invest in property in the UK were foreign exchange, relative value and diversification. “Prime Central London property prices remain substantially lower than the 2014 peaks,” he said, pointing to figures from real estate firm Knight Frank showing that 6.9% of buyers in that area of the capital in the first quarter of last year were American.
What are the biggest legal and tax hurdles for overseas buyers? Stamp Duty Land Tax for non-Brits living in England and Northern Ireland along with Capital Gains Tax non-resident rules for sales, says Cabrera.
Americans should also check their US taxation regarding global income, he adds.
Typical mistakes foreign buyers make when investing in property include “[u]nderestimating leasehold issues, surveys, renovation timescales and sending money abroad without considering the foreign exchange spreads,” Cabrera says.
He advises that “[o]ne of the most important things to do is to create an all-in cost model before buying. This includes Stamp Duty Land Tax, legal fees, surveys, insurance, property management and a currency buffer”.
UK Residency Test
Fellow Texan Benson Varghese, founder and managing partner of law firm Versus Texas, agrees but points out that Americans making the move to the UK must also consider the Statutory Residence Test, which lets you work out your residence status for a tax year in the UK.
“US buyers relocating to the UK face significant legal hurdles with residency under the Statutory Residence Test, which can trigger worldwide taxation after minimal time spent here,” he cautions.
He says tax issues that can arise include a “2% Stamp Duty Land Tax surcharge for non-residents that stacks with second-home rates up to 19%, UK capital gains tax on property sales at 18-24% and inheritance tax exposure on UK real estate regardless of domicile”.
In addition, he warns that “asset transfers risk remittance basis traps where bringing US funds counts as taxable income, plus ongoing IRS filing duties under citizenship-based taxation despite the US-UK tax treaty”.
And he cautions that with more Americans moving to the UK, misunderstandings about compliance are on the rise, something that is compounded by the trend of working remotely. It’s especially the case, says Varghese, when “misjudging residency days or remittance rules, leading to surprise HMRC audits”.
He adds that the “costliest errors involve unintended UK tax residency, triggering worldwide income tax, double taxation without proper treaty credits and inheritance tax hits on estates over thresholds without prior planning”.
For wealthy Americans eyeing up a home in Britain, Varghese advises that they should appoint “cross-border tax advisors immediately to model residency scenarios, review ownership structures like trusts versus direct buys and align estate plans before any offer”.
Divorce, Children and Custody
What happens when an American couple split and have children yet one party wishes to exit the US and live in England or another UK country? It can be hugely problematic, says Joanna Smykowski, an attorney who runs parenting planner CustodyXChange.
“An international move to the UK can severely disrupt custody arrangements for separated or divorced families, as UK courts require consent from everyone with parental responsibility or a specific court order before permanently relocating a child,” she says.
“Without this, the move risks being treated as child abduction under the Hague Convention, especially if the child was habitually resident elsewhere, forcing swift return proceedings that prioritise the child’s welfare but often favour stability.”
Divorced parents could face jurisdictional battles where UK family courts assess a child’s best interests through factors like emotional ties, education needs and contact feasibility, potentially overriding foreign orders if not properly recognised, says Smykowski.
She advises that both parties should “seek written consent from all parties early, pursue mediation to formalise new parenting plans with detailed contact schedules and apply for court orders like Specific Issue Orders if needed, while mirroring arrangements in the destination country”.
And American parents need to be aware that there may be problems with enforcing UK orders abroad as well as complications with visas that could result in access visits not happening and sudden residency tests that could cause jurisdiction to change.
“High-conflict cases often escalate over timezone logistics or school holidays, turning minor disagreements into costly international litigation,” Smykowski cautions.
Lower UK Costs, Free Healthcare
At a time when many Americans are dealing with the shock of having to pay thousands of dollars more for their healthcare premiums — the monthly cost has soared by almost 115%, according to one industry estimate — free healthcare in the United Kingdom represents something of a dream.
“A stronger pound against the dollar has made UK property and living costs more affordable for Americans right now, alongside remote work flexibility and escaping sky-high US healthcare premiums,” says Andrew Gosselin of coupon platform SaveMyCent.
“Lower everyday expenses like groceries and public transport in the UK beat US averages outside major cities, while NHS access eliminates massive insurance bills that drain US families.”
The most affordable housing options in the UK, says Gosselin, are in the north of England and also Scotland, “where prices sit 40 to 60 percent below comparable US spots, drawing buyers seeking lifestyle upgrades without breaking the bank”.
And with the British pounds up 10 percent in recent times, the exchange rate against the US dollar is another major attraction, he says. While the cost of living is generally lower in the UK and rents can be nearly 50% less compared to the States, Americans considering London as their base can expect rents similar to those in New York, says Gosselin — sky-high.
So the biggest saving Americans in the UK stand to make are in healthcare but also on utility bills, which are also mostly lower than in the US, “yet many botch finances by skipping currency hedging and locking in poor transfer rates that eat 5 to 10% upfront”, he says.
Other pitfalls he points to “include ignoring non-resident stamp duty surcharges doubling to 17 percent, underestimating remittance taxes on moved assets and buying without exit strategies that trigger capital gains shocks on resale”.
Failure to Do Homework
Will Americans continue to flock to British shores, permanently leaving their homeland behind, or could it be a passing fad? Will they return home once Trump’s term ends — if the almost 80-year-old billionaire does go and the next president is deemed acceptable? Justin Chau sees the transatlantic trend lasting, and it’s more about property than politics. .
“US buyers are facing unaffordable housing prices matched with high interest rates. The US housing market is set to rebound, [but] it’s going to take years before doing so, in which many buyers have opted towards the UK market instead,” says Chau, who deals in property in and around the San Gabriel Valley area of Los Angeles.
“I think it’s a momentary shift that is happening due to affordability issues.”
But in Chau’s experience, Americans are not doing their homework before relocating to Britain.
“Even the idea of using realtors is completely different when it comes to purchases in the UK,” he says.
“There are a lot of rules that differ from purchasing in the US. Buyers should really spend a lot of time learning how home purchases work in the UK before attempting to buy, almost as if they were a first-time home buyer.”
