Estate Planning for US Citizens in the UK - Avoiding Cross-Border Tax Traps

Introduction

For US citizens living in the UK, estate planning is rarely straightforward. Unlike most countries, the United States taxes individuals based on citizenship rather than residence, creating a complex overlap between UK succession planning and US federal tax rules.

As a result, many common UK planning arrangements, including discretionary trusts, ISAs, pensions, family investment companies and even standard UK wills, can trigger unexpected US reporting obligations, punitive anti-avoidance rules and significant double taxation risks.

This webinar will help advisers identify the most common estate planning traps affecting US-connected individuals in the UK and explore effective drafting and structuring strategies to reduce exposure while preserving tax efficiency on both sides of the Atlantic.

The webinar will focus on the real-world issues faced by practitioners advising:

• US citizens resident in the UK
• Dual nationals
• Green card holders
• UK spouses of US citizens
• International families with US beneficiaries

It will also examine the importance of coordinating UK legal advice with US tax counsel, together with the professional and regulatory risks that can arise when cross-border tax issues are missed or misunderstood.

What You Will Learn

This webinar will cover the following:

• Understanding the US citizenship-based taxation system and its global reach
• Key differences between UK inheritance tax (‘IHT’) and US estate and gift tax regimes
• Establishing domicile, deemed domicile, and the interaction of the UK-US tax treaty
• How the UK-US Estate and Gift Tax Treaty operates in practice
• Common drafting pitfalls in UK wills for US-connected clients
• Why standard UK discretionary trusts can trigger adverse US tax consequences
• US classification and tax treatment of UK trusts as ‘foreign trusts’
• Grantor trust versus non-grantor trust analysis and implications
• PFIC exposure risks within typical UK investment structures
• Issues arising from ISAs, OEICs and offshore reporting fund regimes
• US tax considerations affecting UK pension arrangements
• Estate planning considerations for UK spouses of US citizens
• Use and limitations of Qualified Domestic Trust (‘QDOT’) planning
• Pitfalls associated with joint property ownership for US-connected individuals
• Lifetime gifting strategies and associated US reporting obligations
• FATCA compliance requirements and ongoing reporting obligations
• Effective coordination between UK advisers and US tax professionals
• Managing professional risk, including negligence and scope-of-retainer issues in cross-border work
• Practical drafting guidance for wills involving US-connected clients
• Identifying ‘red flag’ scenarios requiring specialist US tax advice