Accountants for US and UK: Founder Visa First-Year Returns

An American founder's first year in London produces two sets of returns: a UK Self Assessment return that sets out the split-year arrival date and any four-year FIG claim, and a US Form 1040 that picks foreign tax credits or the exclusion and reports the new UK company and bank accounts. The two returns must agree with each other.

Finding Accountants for US and UK returns matters more in the arrival year than in any year after it. The first year sets the facts, the elections and the figures that every later return relies on. A wrong split-year case, a missed FIG claim or a Form 1040 that leaves out the new company's information return can each go uncorrected for years. This guide goes through the first-year filings in order for a founder who has moved to London on a Global Talent or Innovator Founder visa and has either set up a UK company or moved an existing startup to the UK. It covers what to prepare and how the two returns fit together. It does not cover pre-arrival planning or company structuring, and it gives no immigration advice.

Why is the first year the hardest return to get right?

The two tax years do not line up. The UK tax year runs from 6 April to 5 April. The US tax year is the calendar year. A founder who lands in London in September 2026 is covered by two UK tax years (2026-27, and 2027-28 from next April) and two US tax years (2026, and 2027 from January). So the first year of life in the UK touches four returns. Salary, dividends and gains have to be put into the right period on each side before any foreign tax credit can be matched to the income it relates to.

Three other things make it harder:

• Residence is decided by a statutory test, not by your visa. The UK statutory residence test (SRT) decides whether you are UK resident for the year. Split-year treatment then decides whether that year is divided into a non-resident part and a resident part.
• The FIG regime needs a claim. Since 6 April 2025, the old non-dom remittance basis has gone. New arrivals may claim four years of relief on foreign income and gains, but only through the return, source by source, and each claim has a cost.
• The US keeps taxing you on everything. Because the US taxes its citizens wherever they live, moving to London adds UK filings on top of your US filings. It does not replace them. The UK company and UK bank accounts bring new US information returns, and the penalties for missing those are often larger than the tax itself.

UK side: residence, split-year treatment and registration

How does the statutory residence test apply in the arrival year?

The SRT works through three tests in order: the automatic overseas tests, then the automatic UK tests, then the sufficient ties test. A founder who moves to London for good will usually be UK resident in the arrival year. That can happen through the 183-day automatic test, through having only one home and that home being in the UK, or through full-time work in the UK. It can also happen through the sufficient ties test when UK days combine with family, accommodation and work ties. The HMRC RDR3 guidance on the statutory residence test is the main reference. Keep a record of the day count and of the date you first had a UK home and started UK work, because the split-year analysis depends on the same evidence.

Which split-year case applies to an arriving founder?

Split-year treatment is not optional. If the conditions of a case are met, it applies, and you set it out on the residence pages (SA109) of the Self Assessment return. Five cases cover arrivals. Two usually fit a founder:

• Case 4: starting to have your only home in the UK. This fits a founder who gives up the US home and moves into a London flat. The UK part of the year starts on the day the UK home becomes your only home.
• Case 5: starting full-time work in the UK. This fits a founder who becomes a full-time director or employee of the UK company and meets the hours test over a 365-day period. The UK part starts on the first day of that UK work.

Where more than one case could apply, the legislation has priority rules that set the split date. This matters for a founder who kept a US home for a few months after arriving, or who began working for the UK company before moving. The date is not a formality. Income before it is generally outside UK tax. Income after it is inside, unless the FIG regime shelters it. The US return then has to put that same date to use when sourcing income for foreign tax credits.

Registering for Self Assessment and getting a UTR

An American who arrives on PAYE salary alone may think no return is needed. A founder almost always needs one. Dividends, foreign income, a split-year claim and a FIG claim all have to go through Self Assessment. Register for Self Assessment on GOV.UK by 5 October after the end of the first UK tax year. HMRC then posts a Unique Taxpayer Reference (UTR). Allow several weeks, because many new arrivals are also still waiting for a National Insurance number. Online returns are due by 31 January after the end of the tax year, and any balance of tax is due that day. Payments on account for the following year may also start, due each 31 January and 31 July.

The four-year FIG regime: claiming it on the first UK return

The foreign income and gains (FIG) regime is the main UK change a new arrival has to deal with. A "qualifying new resident" is someone who has not been UK resident in any of the ten consecutive tax years before arriving. Most American founders who have never lived in the UK meet that test. They can then claim relief from UK tax on qualifying foreign income and gains for up to four tax years, counting from the first year of UK residence. Unlike the old remittance basis, the relief does not depend on keeping money outside the UK. Relieved income can be brought to London with no further UK charge.

How the claim is prepared on the first return:

1. Confirm the four-year window. The arrival year counts as year one even when it is a split year. A September arrival therefore uses a full year of the window on roughly seven months of residence.
2. Find each foreign source. Typical sources are US brokerage dividends and interest, US rental income, gains on US-held shares, and income from US partnerships or funds. Foreign employment income is not covered by FIG. It is dealt with under the separate overseas workday rules.
3. Quantify and claim source by source. The claim is made on the return, and HMRC expects the relieved amounts to be stated, not left out. "Exempt" still means "disclosed".
4. Weigh the cost. A claim takes away the income tax personal allowance and the capital gains tax annual exempt amount for that year. For a founder on a large salary the personal allowance may already be lost through tapering, which makes the claim cheaper.

The US-citizen twist on FIG

Most UK-only guidance leaves this out. A FIG claim takes UK tax off US-source income. It does not take US tax off it. For a US citizen, that often works well: US dividends and gains are then taxed only by the IRS, often at 15% or 20% federal rates, instead of carrying UK tax of up to 39.35% on dividends with a treaty credit for the US tax. But the claim also changes the US foreign tax credit calculation, because there is now no UK tax on those items to credit. And the loss of the personal allowance increases UK tax on the UK salary. The right answer depends on the year and is worked out from both returns together. It should never be a default setting in software.

US side: the continuing Form 1040

You keep filing Form 1040 after the move. A US person living abroad on the regular due date (15 April) gets an automatic extension to 15 June to file and pay. They can extend further to 15 October, although interest runs from April on any unpaid tax. Many first-year founders extend deliberately so the UK figures are final before the US return is filed.

Foreign tax credit or foreign earned income exclusion?

The foreign earned income exclusion (FEIE) removes a set amount of foreign earned income from US tax: $130,000 for 2025, indexed each year. To qualify in the arrival year you normally rely on the physical presence test, which needs 330 full days abroad in a 12-month period. A September arrival often cannot meet that until well into the following year. Form 2350 exists to extend the deadline for exactly this situation.

For most London founders the foreign tax credit (Form 1116) is the better route:

• UK income tax rates on salary (40% and 45% bands) are generally above US federal rates. The credits usually wipe out the US tax on UK earnings, and unused credits can generally be carried back one year and forward ten.
• The FEIE covers only earned income. It does nothing for dividends from the founder's own UK company, which are often the larger figure.
• Claiming the FEIE blocks credits on the excluded income. If you claim it and later revoke it, you generally cannot claim it again for five years without IRS consent. An arrival-year choice therefore affects several later returns.

UK National Insurance on founder salary is covered by the US-UK totalization agreement. As a result it is generally not creditable against US tax. A salaried director of a UK company normally pays UK National Insurance only, with no US social security tax.

Founder salary versus dividends: how each appears on each return

This section is about reporting, not about choosing a mix. Whatever the company has paid, the two returns treat the two types of income very differently:

Item	UK return (Self Assessment)	US return (Form 1040)
Director's salary	Taxed through PAYE and reconciled on the return. Employee and employer National Insurance apply.	Foreign earned income. Eligible for the FEIE or the general-category foreign tax credit.
UK tax on salary	Income tax at 20%, 40% and 45% (Scottish rates differ).	Creditable on Form 1116. National Insurance generally not creditable (totalization).
Dividends from the UK company	£500 dividend allowance, then 10.75%, 35.75% or 39.35% for 2026-27. No UK withholding at source.	Reported as dividends. Qualified-dividend rates may apply under the treaty. Not eligible for the FEIE. The CFC rules may already have taxed some of the company's income.
UK tax on dividends	Paid through Self Assessment by 31 January.	Creditable, subject to basket and sourcing rules. Timing gaps across the tax years matter.
Arrival-year timing	Only amounts in the UK part of a split year are taxed.	Full calendar-year income. Pre-arrival amounts carry no UK credit.

The main point for preparation: a dividend declared in March and paid in April falls in two different UK tax years, depending on the payment date, but in the same US calendar year. Credits have to follow the UK tax that was actually paid on that dividend, so the two sets of working papers must be matched line by line.

The new US information returns a UK company triggers

Owning or controlling a UK limited company as a US person brings information returns that did not exist before the move.

Form 5471

A US citizen who owns or controls a foreign corporation generally has to file Form 5471 with the Form 1040. The filing category, and so how much of the form is required, depends on how much you own and whether you control the company. A founder who owns more than 50% of a newly formed UK company is usually a full filer. Treat it as a fixed obligation with its own penalty regime: the standard penalty is $10,000 per form per year. Missing it also keeps the statute of limitations open on the whole return. The company's accounts, prepared under UK standards, are converted to US figures for the form. So the UK statutory accounts and the US return have to be scheduled together. A controlled UK company can also create US income inclusions for its shareholders under the CFC rules, even when no dividend has been paid. Those figures come from the same work that feeds Form 5471.

Transfers into the new company

Putting cash or property into a foreign corporation can require Form 926. This generally applies where the US person owns at least 10% after the transfer, or transfers more than $100,000 in cash within 12 months. Founders funding a new UK company often meet one of these tests in the first year without noticing.

FBAR and Form 8938 for the new UK accounts

In the first year a founder typically opens a UK current account, a savings or investment account, and a company account for the new business. Each can be reportable:

• FBAR (FinCEN Form 114). Required when the combined highest balances of all foreign accounts exceed $10,000 at any point in the year. This includes accounts where you only have signature authority, so the company's UK bank account usually counts. The FBAR is filed separately from the tax return. It is due 15 April with an automatic extension to 15 October. See the IRS FBAR guidance. To see what a missed FBAR could cost, use our FBAR penalty calculator.
• Form 8938 (FATCA). For a single filer living abroad, the thresholds are $200,000 at year end or $300,000 at any time during the year. For a married couple filing jointly they are $400,000 and $600,000. Shares held directly in a foreign company are a specified foreign financial asset. Where the company is already reported on Form 5471, Form 8938 generally records that and does not repeat the detail. See About Form 8938.

UK ISAs and UK-domiciled funds do not fit neatly into US rules. They can bring US reporting and income issues that a UK adviser would not raise. If the first year has already closed and any of these returns were missed, a structured catch-up is usually available through the IRS Streamlined procedures, including the Streamlined Foreign Offshore Procedure for non-wilful filers resident abroad.

A first-year preparation checklist

1. Record your arrival date, the date the UK home was set up, the date UK work started, and a full UK day count.
2. Register for Self Assessment and get a UTR before 5 October after the first UK tax year ends.
3. Decide which split-year case applies and record the evidence for it.
4. List every foreign income and gains source and model the FIG claim against the lost allowances.
5. Collect P60s, P11Ds and payslips from the UK company, plus dividend vouchers and board minutes with payment dates.
6. Extend the Form 1040 if the UK figures are not final. Choose FTC or FEIE with the five-year consequences in mind.
7. Prepare Form 5471 (and Form 926 if relevant) from the UK company's accounts, converted to US figures.
8. File the FBAR and, where the thresholds are met, Form 8938. Include company accounts where you have signature authority.
9. Check whether your former US state still treats you as resident, particularly if you kept a home or driver's licence there.
10. Reconcile the two returns: the same income, the same dates, and credits that match the UK tax actually paid.

Where first-year returns usually go wrong

• Filing the UK return with no split-year claim. This brings pre-arrival US income into UK tax for no reason.
• Claiming FIG without quantifying it, or claiming it where the lost personal allowance costs more than the relief saves.
• Claiming the FEIE on reflex when UK tax already exceeds US tax. This wastes credits and ties up later years.
• Leaving out Form 5471 because the company "made no profit". The obligation depends on ownership, not income.
• Leaving the company account off the FBAR because the account is not in your personal name.

For founders with complex equity, several entities or large pre-arrival gains, our US-UK tax accountants for founders prepare both returns together from a single set of working papers. Our wider US-UK tax accountants team covers the rest of the household's filings.

Speak to a specialist

The first year in the UK is when the filings on both sides need to be matched: the split date, the FIG claim, the credit position and the new information returns. Jungle Tax prepares first-year US and UK returns for American founders and executives. We keep the two returns consistent and treat the IRS information returns as part of the main filing. To arrange a confidential consultation, contact our cross-border team. We will review your arrival facts and set out exactly what each return needs.