The UK has a treaty and a totalization agreement — but your ISA is not tax-free in America.

The ISA is the single item I unwind most often. Cash ISA interest is ordinary taxable interest to the US, and the funds inside a stocks-and-shares ISA are usually passive foreign investment companies, which brings Form 8621 and a punitive default calculation. Nobody at the bank mentions this when you open it.

Pensions are addressable under the treaty, and the 25% tax-free lump sum is the contested one. The UK treats it as tax-free; the US treatment turns on the article relied on and how the scheme is structured. It is a position to take deliberately and document, not to assume.

National Insurance sits inside the totalization agreement, so a self-employed American paying Class 2 or Class 4 generally escapes the 15.3% US SECA charge — with a certificate of coverage as the evidence rather than an assumption.

The UK tax year runs 6 April to 5 April while the US year is the calendar year, so PAYE tax has to be apportioned across two US years. Whether you claim credits when the foreign tax is paid or when it accrues decides how that is done, and the choice is effectively permanent — which makes the first UK return the one worth getting right.

From 6 April 2025 the remittance basis was abolished and replaced by a four-year foreign income and gains regime for new arrivals, with a temporary repatriation facility for amounts arising under the old rules. For a US citizen it changes the UK tax paid, and therefore the credit available, rather than the US obligation — the US has always taxed worldwide income.