Thinking of Moving to the UK from California? Here's How It Affects Your Taxes
If you are planning a move to the UK or already relocated from California, there are important tax considerations you will want to understand, especially if you moved mid-year. U.S. citizens remain subject to U.S. taxes even while living abroad, and California has its own rules for determining when you stop being a resident.
Federal Taxes: Still in the Picture
As a U.S. citizen or green card holder, you are required to file a U.S. tax return every year, reporting your worldwide income. The good news is, you can avoid double taxation with tools like the Foreign Earned Income Exclusion (FEIE), the Foreign Tax Credit, or tax treaty provisions.
If you moved to the UK in 2024, you likely won't meet the "bona fide residence" requirement for the FEIE until sometime in 2025. In that case, you'll want to file:
Form 4868: To extend your U.S. return until October 15, 2025.
Form 2350: If you want to wait beyond October to qualify for FEIE via the bona fide residence test.
You can also qualify for the FEIE using the Physical Presence Test (330 days abroad in any 12-month period), so track your travel dates carefully.
California: Breaking Residency Matters
California taxes you as a resident until you can prove you’ve moved for good. Even if you live overseas, California could still consider you a resident if you maintain strong ties—like owning property in Los Angeles, keeping a car registered in the state, or frequently returning to visit family in the Bay Area.
To stop paying CA income taxes, you will need to:
Prove you left with the intention to remain abroad permanently or indefinitely
Cut significant ties to California, such as giving up your lease in San Francisco, selling a vacation home near Lake Tahoe, etc
File a Form 540NR as a part-year resident for the year you moved
Pay any California tax due through Form FTB 3519 if you are filing an extension
California's appeal—its beaches, mountains, and tech-centered economy—often leads people to keep connections there. But for tax purposes, maintaining access to those amenities (like a ski cabin in Mammoth or a surf shack in Santa Cruz) could keep you tethered to California in the eyes of the Franchise Tax Board.
Don't Forget These
FBAR (FinCEN 114): Required if your foreign accounts exceed $10,000 at any point
Form 8938: If you have significant foreign financial assets
UK Tax Obligations: You’ll need to file UK taxes and may be able to claim a foreign tax credit on your U.S. return
Bottom Line
A mid-year move from California to the UK comes with extra complexity, but with proper planning, you can avoid double taxation and stay compliant on both sides of the pond. File extensions, keep records, and get professional help if your situation involves both federal and state filing, especially in the year of transition.
Need help with your taxes? Book a call with me here to get tailored advice for your move.
Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Always consult a qualified tax professional for advice specific to your situation.
