Self Assessment for US Citizens in the UK: Reporting US Income to HMRC

Self Assessment for US citizens in the UK means reporting US-source income on the SA106 Foreign pages: gross, in pounds, one row per income type, with Foreign Tax Credit Relief claimed only where the US/UK treaty lets the US tax that income. For an American, that last test is stricter than most people expect, and it decides which return carries the credit.

Our earlier guides cover whether you need to file Self Assessment at all, how to register by 5 October and how the UK return fits with your Form 1040. This one is narrower and more practical. It takes each common type of US income, shows where it goes on the SA106, explains the currency conversion, and works through the treaty rule that caps the UK credit for US tax paid by a US citizen.

How do US citizens in the UK report US income on Self Assessment?

US citizens in the UK report US income on the SA106 "Foreign" supplementary pages that sit alongside the main SA100 return. HMRC's SA106 form and notes for the 2025/26 tax year split the pages by purpose: page F 2 and F 3 for interest, dividends, pensions and social security; pages F 4 and F 5 for foreign property; pages F 6 to F 8 for claiming Foreign Tax Credit Relief on income and gains reported elsewhere on the return, such as capital gains or employment income.

Being American does not change the UK rules on what is taxable. A UK resident is taxed on worldwide income, so US interest, US dividends and US pension payments are reported whether or not the money is brought into the UK. The SA106 notes say it plainly: put the full amount in the boxes "even if you did not bring the income into the UK". What being American changes is the credit, because the US taxes you on the same income by reason of citizenship.

How the SA106 columns work

Each income section on page F 2 and F 3 uses the same six columns. Getting them right is most of the job.

Column	What goes in it	Notes for US income
A	Country or territory code	USA for US-source income
B	Income before any tax taken off, in pounds	Always the gross figure, converted to sterling
C	Foreign tax taken off or paid, in pounds	The lower of the tax actually paid and the credit the treaty allows
D	Special Withholding Tax and any UK tax taken off	Rarely relevant to US income
E	X to claim Foreign Tax Credit Relief	Only where the treaty lets the US tax the income
F	Taxable amount	Column B if claiming the credit; otherwise column B minus column C

Column F is where people slip. If you tick column E, column F repeats the gross figure from column B and HMRC gives a credit against the tax. If you do not tick it, column F is the income net of foreign tax, which is a deduction rather than a credit and is usually worth less. The notes add a trap for small investors: if your dividends are covered by the Dividend Allowance, no UK tax is due on them and no Foreign Tax Credit Relief can be claimed.

Which exchange rate should you use?

The SA106 notes tell you to "convert the income into UK pounds using the exchange rate at the time the income arose", and if you are unsure, to use HMRC's published yearly exchange rates. HMRC publishes both yearly averages and spot rates on that page.

Three practical points follow for Americans with US accounts:

• Use the payment date for large single items. A one-off distribution from a 401(k) or a large special dividend should be converted at the rate for the day it was paid.
• Be consistent for regular income. Quarterly dividends and monthly interest are commonly converted using a consistent, documented method. Whatever you choose, apply it the same way to the income and the US tax on it, so the credit and the income match.
• Remember the two tax years. The UK year runs 6 April to 5 April, so a 2025/26 return picks up US income from April to December 2025 and January to early April 2026. Your Form 1099s are issued for calendar years, so each UK return draws on two sets of US statements.

Why is Foreign Tax Credit Relief limited for US citizens?

Foreign Tax Credit Relief for a US citizen resident in the UK is limited by Article 24(6) of the 2001 US/UK tax treaty. On US-source income, the UK only takes into account "the amount of tax, if any, that the United States may impose under the provisions of this Convention on a resident of the United Kingdom who is not a United States citizen". Any US tax above that figure is charged purely because of your citizenship, and the UK does not credit it.

The treaty then hands the problem back to the US. Article 24(6)(c) requires the US to allow a credit for the UK tax paid after the UK's own limited credit, and re-sources the income so that the US foreign tax credit limit on Form 1116 can absorb it. HMRC summarises the position in its Double Taxation Relief Manual at DT19853. The saving clause behind all this is explained in our guide to the saving clause in the US/UK treaty.

In practice, this means the UK credit on the SA106 is set by the treaty rate for each income type, not by your actual US bill, and the US return picks up the rest.

US income types on the SA106, one by one

US bank and brokerage interest

US interest goes in "Interest and other income from overseas savings" on page F 2, with the total in box 4. Article 11(1) of the treaty makes interest taxable only in the country of residence, so the US could not tax a British resident who is not a citizen. Under Article 24(6), the UK credit is therefore nil: leave column E blank and relieve the double tax on the US return. The UK Personal Savings Allowance still applies to interest taxed as it arises; GOV.UK gives £1,000 for basic rate taxpayers, £500 for higher rate and nothing for additional rate. The SA106 notes also say distributions from an offshore fund more than 60% invested in interest-bearing assets are treated as interest, which catches some US bond funds.

US dividends

US dividends go in "Dividends from foreign companies", total in box 6. Article 10(2) of the treaty lets the US tax portfolio dividends paid to a UK resident at up to 15%, so a US citizen can claim UK credit up to 15% of the gross dividend, but no more, even if the US tax on the Form 1040 is higher. For 2025/26 the SA106 notes confirm a £500 Dividend Allowance and dividend rates of 8.75%, 33.75% and 39.35%; GOV.UK's dividend tax page carries the current figures. US mutual funds and ETFs are usually offshore funds for UK purposes, and gains on non-reporting funds can be taxed as income rather than capital gains, so check the fund's status against HMRC's reporting funds list before filing.

401(k) and IRA distributions

Regular payments from a 401(k) or traditional IRA go in "Overseas pensions, social security benefits and royalties", total in box 9. Article 17(1)(a) gives the country of residence the sole right to tax pensions, so for a non-citizen the US would charge nothing and, for a citizen, the UK credit under Article 24(6) is again nil. The UK taxes the payment; the US taxes it by reason of citizenship and gives the credit. Lump sums are different, because Article 17(2) lets the US tax them; our guide to 401(k) UK tax treatment covers HMRC's current view of lump sums and the pre-April 2017 deduction. Qualified Roth distributions can fall within Article 17(1)(b), which exempts in the UK a pension payment that would be exempt in the US; confirm the account type before relying on it.

US Social Security

US Social Security also goes in the overseas pensions and social security section. Article 17(3) says social security payments made by one country to a resident of the other "shall be taxable only in that other State", and Article 1(5) lists paragraph 3 of Article 17 among the exceptions to the saving clause. The result: a UK-resident US citizen pays UK tax on US Social Security and no US tax. There is no US tax to credit, so column E stays blank. On the US side, the Form 8833 instructions waive disclosure for treaty positions on social security, as our Form 8833 guide explains.

US rental income, gains and earnings

A US rental property goes on the foreign property pages, F 4 and F 5, not page F 2. Article 6 lets the US tax real property income, so Foreign Tax Credit Relief is available for the US tax on the rental profit. Capital gains are reported on the SA108 Capital Gains pages, with any credit claimed on pages F 6 and F 7. For gains on US shares, Article 13(5) generally leaves the gain to the country of residence, so the UK credit for a US citizen is often nil and relief sits on the US return; Article 13(6), however, preserves a right for the other country to tax an individual who was resident there at any time in the six years before the sale, which can change the answer for recent arrivals. Days worked in the US while UK resident can create US-source employment income, which the US may tax; credit for it is claimed on page F 8, with the income itself on the Employment pages.

Quick reference: where each US income type goes

US income	SA106 section	Treaty article	UK credit for a US citizen
Bank and brokerage interest	Overseas savings, page F 2 (box 4)	Article 11	Nil: relieve on US return
Portfolio dividends	Dividends from foreign companies (box 6)	Article 10	Up to 15% of the gross dividend
401(k) or IRA regular payments	Overseas pensions (box 9)	Article 17(1)(a)	Nil: relieve on US return
US Social Security	Overseas pensions and social security (box 9)	Article 17(3)	None needed: US does not tax it
US rental profit	Foreign property, pages F 4 and F 5	Article 6	Available for US tax on the profit
Gains on US shares	SA108, credit on pages F 6 and F 7	Article 13(5) and 13(6)	Often nil; depends on the six-year rule

Illustrative example: an American higher rate taxpayer in Manchester receives US dividends worth £3,000 after conversion, and US bank interest worth £1,200, in the 2025/26 tax year. On the SA106 she enters the dividends at £3,000 in column B with the USA code, puts the 15% treaty amount of £450 in column C and ticks column E; she enters the interest at £1,200 in column B, with nothing in columns C or E. The UK then taxes the dividends above the £500 allowance at 33.75%, less the £450 credit, and taxes the interest above her £500 savings allowance at 40%. On her Form 1040 she reports the same income in dollars and claims a foreign tax credit on Form 1116 for the UK tax left after the UK credit. The figures are illustrative only; the right answer depends on the full return.

A step-by-step order that keeps both returns straight

1. Confirm UK residence for the year, including any split year, because it decides whether the SA106 is needed at all.
2. Gather the US statements for both calendar years that overlap the UK tax year, and extract income by date.
3. Convert each item to pounds using the rate at the time it arose, or a documented consistent method, and keep the workings.
4. Classify each item by treaty article: interest, dividend, pension, social security, rent or gain.
5. Set the UK credit at the amount the US could charge a non-citizen UK resident, not the US tax on your 1040.
6. Complete the SA106, ticking column E only for the income where a UK credit exists.
7. Finalise the US return with the UK tax figures, claiming the remaining relief on Form 1116.

Our guide to double taxation relief between the US and UK explains the US side of that last step in more detail.

Does the four-year FIG regime change what you report?

It can. Since 6 April 2025, a person who becomes UK resident after at least ten consecutive years of non-residence can claim relief from UK tax on qualifying foreign income and gains for their first four years, under the regime described in HMRC's HS266 helpsheet. Many Americans who moved from the US recently qualify.

The claim is made on the SA109 pages, and the relieved amounts still appear on the SA106, in boxes 4.1, 6.1 and 9.1 for interest, dividends and pensions. The SA106 notes are clear that you cannot claim both FIG relief and Foreign Tax Credit Relief on the same income. A claim also costs the personal allowance and the capital gains annual exempt amount for that year, so it needs modelling rather than ticking by default.

What people get wrong on the Foreign pages

• Claiming the full US tax as a credit. For a US citizen, the UK credit on dividends stops at 15%, and on interest and pensions it is nil.
• Reporting net rather than gross. Column B is always the gross income in pounds; the tax goes in column C.
• Leaving US Social Security off the UK return because it is "US income". It is taxable only in the UK.
• Mixing up calendar and tax years, so income from January to early April is missed or reported twice.
• Ticking column E on dividends inside the £500 allowance, where no UK tax arises and no credit can be claimed.
• Treating US funds as ordinary shares without checking offshore fund status.

Getting Self Assessment for US citizens in the UK right

The SA106 is a short form with a long set of rules behind it, and for Americans the treaty's credit limit changes the answer on almost every line. We prepare Self Assessment for US citizens in the UK with the US return in view, and handle the credit claims through our treaty relief service. You can read more about how we work with Americans living in the UK. US/UK Cross Border Tax — US CPAs and UK tax advisers working as one team; London, Manchester, New York, San Francisco. If you want both returns worked through together, get in touch.