Leaving America?
There’s a lot of movement right now - opportunities are more global than ever.
Musicians are still making the move to LA, film production in the UK is ramping up, Golfers earning potential only increasing on PGA Tour, and the Middle East is hosting more high-profile fights than ever before.
That’s leading more athletes and entertainers to move, and for those leaving America, it’s not always so easy.
The financial setup that worked for them in the U.S. might not travel well.
1. Managing U.S. Ties On The Way Out
Many assume they stop being a U.S. tax resident the moment they leave. It’s not always that simple.
The U.S. substantial presence test looks at the last three years of days spent in the country, not just the current year. Someone leaving in March 2025 might think they’re clear, but if they spent too many days in 2023 and 2024, they could still be considered a U.S. tax resident for 2025.
For U.S. citizens or long-term green card holders, there’s also the Exit Tax to consider.
This is often forgotten about – take for example an Actress leaving America who’s held a green card for 10 years. The U.S. may treat her assets as if they were sold when they give up U.S. status, potentially triggering tax on investment gains, real estate, business interests, and even more punitive rules assets like UK pensions.
2. The U.S. Financial Products That Don’t Travel Well
Most people assume their financial setup will work the same way after they move. However, its not always the case, and there are some assets which
- U.S. Life Insurance Policies: Some - not all - are inflexible, and lose their tax benefits abroad, they can also be costly to get out of.
- U.S. Living Trusts: Great for estate planning in America, but not always ideal if you weren’t born there. Simply transferring money into a U.S. living trust can trigger unexpected tax in the UK.
- U.S. LLCs: In the U.S., they’re tax-efficient. But, for example, the UK historically hasn’t recognised the structure, leading to double taxation with no relief.
Bottom line: What worked well in the U.S. might be costly, rigid, or inefficient in another country.
3. The Investments That Can Have Tax Issues
It’s not just structures. Investment choices can also backfire after a move.
- U.S. Mutual Funds & ETFs: These are common, often great investment vehicles in the U.S. But if you’re moving back to the UK, they don’t get the same treatment. Profits can be taxed as income - up to 45%, wiping out much of the growth.
4. The Mistakes We See Too Often
- “I’ll sort it after I move.”
By then, it’s often too late to take advantage of restructuring opportunities. - “My U.S. advisor says it’s fine.”
U.S. advisors aren’t always familiar with cross-border tax rules or planning strategies. - “I’ll just keep my U.S. setup.”
This can lead to double taxation, exit penalties, or compliance headaches.
What does work?
Planning before the move.
The right setup from day one can keep taxes low, reduce complexity, and avoid unnecessary costs - keeping your client nimble enough to up sticks and leave when you want.
Estate Planning, Inheritance Tax Planning and Tax Planning are not regulated by the Financial Conduct Authority
Investment advice and investment advisory services offered and provided through Blacktower Financial Management US, LLC. This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, tax advice, tax recommendations, investment recommendations or investment research. You should seek advice from a professional before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
