U.S. citizen in the UK: married to a non-u.s. spouse, filing separately, california, ties kept
Combined marginal rate across this income: 52.6%. Rates are 2026 marginal rates after treaty credits, as an upper bound.
- Residence
- United Kingdom, 6 full year(s)
- U.S. filing status
- Married filing separately
- Income (all sources)
- 99,500 GBP ≈ $132,335
- U.S. ordinary marginal rate
- 24%
- U.S. qualified rate
- 15%
- NIIT exposed
- yes
- U.S. state
- California (ties kept)
- UK band
- higher
- UK marginal rate
- 40%
- FIG window
- no
| Income | Amount | U.S. | State | UK | Who taxes | Combined |
|---|---|---|---|---|---|---|
| Salary | £90,000 | 24% | 13.3% | 40% | Residence first, U.S. credits | 53.3% |
| Bank interest (local) | £500 | 24% | 13.3% | 40% | Residence first, U.S. credits | 57.1% incl. NIIT |
| Dividends from U.S. companies | £1,500 | 15% | 13.3% | 35.8% | U.S. first, residence credits | 52.8% incl. NIIT |
| Dividends from local companies | £1,500 | 15% | 13.3% | 35.8% | Residence first, U.S. credits | 52.8% incl. NIIT |
| Gains on shares sold | £6,000 | 15% | 13.3% | 24% | Residence first, U.S. credits | 41.1% incl. NIIT |
Why each income is taxed this way
Salary · 53.3% · Taxed where you work; the U.S. credits that tax (FTC). The FEIE is the alternative.
- U.S.: Ordinary income, marginal 24%
- State: California resident, up to 13.3%, no credit for foreign tax
- UK: Income tax, marginal 40% · social contributions: National Insurance 8% / 2%
- California resident: state tax is added because states give no credit for foreign tax.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.ORDINARY.2026 · US.STACKING · STATE.RESIDENT · STATE.STICKY · GB.INCOME.2026 · GB.NI · US-GB.SAVING · US-GB.ART24 · US.FTC · US.FEIE.2026
Bank interest (local) · 57.1% · UK taxes first; the U.S. credits UK tax.
- U.S.: Ordinary income, marginal 24%
- State: California resident, up to 13.3%, no credit for foreign tax
- UK: Savings at 40% after the Personal Savings Allowance
- 3.8% NIIT on top: no foreign credit allowed.
- California resident: state tax is added because states give no credit for foreign tax.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.ORDINARY.2026 · STATE.RESIDENT · STATE.STICKY · GB.INCOME.2026 · GB.SAVINGS · US-GB.ART24 · US.FTC
Dividends from U.S. companies · 52.8% · U.S. taxes first (15%); the UK credits it; the U.S. credits UK tax above 15%.
- U.S.: Qualified dividends 15%
- State: California resident, up to 13.3%, no credit for foreign tax
- UK: Dividend tax 35.75% (credit for 15% U.S. tax)
- 3.8% NIIT on top: no foreign credit allowed.
- California resident: state tax is added because states give no credit for foreign tax.
US.WORLDWIDE · US.QUALIFIED.2026 · STATE.RESIDENT · STATE.STICKY · GB.DIVIDENDS.2026 · US-GB.ART24 · US.FTC
Dividends from local companies · 52.8% · UK taxes first; the U.S. credits UK tax.
- U.S.: Qualified dividends 15%
- State: California resident, up to 13.3%, no credit for foreign tax
- UK: Dividend tax 35.75% above £500
- 3.8% NIIT on top: no foreign credit allowed.
- California resident: state tax is added because states give no credit for foreign tax.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.QUALIFIED.2026 · STATE.RESIDENT · STATE.STICKY · GB.DIVIDENDS.2026 · US-GB.ART24 · US.FTC
Gains on shares sold · 41.1% · UK taxes first; the U.S. credits UK tax.
- U.S.: Long-term gains 15%
- State: California resident, up to 13.3%, no credit for foreign tax
- UK: CGT 24% above £3,000 (non-UK shares exempt during FIG)
- 3.8% NIIT on top: no foreign credit allowed.
- California resident: state tax is added because states give no credit for foreign tax.
- Excess foreign credit carries forward 10 years (same category only).
US.WORLDWIDE · US.QUALIFIED.2026 · STATE.RESIDENT · STATE.STICKY · GB.CGT.2026 · US-GB.ART24 · US.FTC
Forms to file
| IRS | Form 1040 | Every year, wherever you live (June 15 for filers abroad). |
| IRS | Form 1116 | Credit for French/UK tax, by category (general, passive). |
| IRS | Form 8960 | Net Investment Income Tax. |
| IRS | FinCEN 114 (FBAR) | Foreign accounts ≈ $159,600, above $10,000. |
| State | California resident return | Ties kept: the state can still tax you as a resident. |
| HMRC | SA100 | Self Assessment: income not fully taxed through PAYE (register by 5 October). |
| HMRC | SA100 | Supplementary page. |
| HMRC | SA106 | Foreign income (U.S. dividends, rent, pensions) and foreign tax credit. |
| HMRC | SA108 | Capital gains above the thresholds. |
Watch out for
3.8% NIIT on investment income
Your income is above the threshold. Foreign tax cannot offset it (Federal Circuit, August 2026).
California can still tax you
Keeping ties makes you a likely California resident: up to 13.3% on top, with no credit for foreign tax. California presumes you remain domiciled unless you clearly cut ties, and gives no credit for foreign tax.
Non-U.S. spouse
Filing separately keeps your spouse's income and accounts out of the U.S. system; joint filing needs an election and brings in their worldwide income.
One social security system
Totalization agreements mean you pay social contributions where you work, not U.S. FICA or self-employment tax (keep a certificate of coverage if self-employed).
Rule trace (21 rules)
- US.WORLDWIDE — Citizenship-based taxation. U.S. citizens and green-card holders report worldwide income every year, wherever they live. (high, checked 2026-11-15 · IRS — U.S. citizens and resident aliens abroad (official))
- US.ORDINARY.2026 — 2026 ordinary income brackets. 10% to 37%. Single: 22% from $50,401, 24% from $105,701, 32% from $201,776. Joint: 22% from $100,801. (high, checked 2026-11-15 · IRS — Rev. Proc. 2025-32 (inflation adjustments for 2026) (official) · Tax Foundation — 2026 brackets (Rev. Proc. 2025-32))
- US.STACKING — FEIE stacking rule. Income excluded with the FEIE still sets the rate on the rest of your income. (medium, checked 2026-11-15 · 26 U.S.C. §911 — foreign earned income exclusion, stacking in (f) (official))
- STATE.RESIDENT — State residency follows your ties. A state can keep taxing your worldwide income while you keep a home, licence or voter registration there. States rarely credit foreign tax. Xpat's reading Xpat's reading: Domicile is decided on facts, state by state. Xpat assumes the state taxes you as a resident whenever you say you kept ties, at its top rate. (medium, checked 2026-11-15 · Tax Foundation — state income tax rates 2026)
- STATE.STICKY — Sticky states. California, Virginia, New Mexico and South Carolina are known for treating former residents as still domiciled. Xpat's reading Xpat's reading: A practitioner's shortlist, not a legal category: these states audit departures more often. (medium, checked 2026-11-15)
- GB.INCOME.2026 — UK income tax 2026/27. 20% to £50,270, 40% to £125,140, then 45%. The £12,570 allowance is withdrawn between £100,000 and £125,140 (60% effective). (high, checked 2026-11-15 · GOV.UK — Income Tax rates and Personal Allowances (official))
- GB.NI — National Insurance. Employees pay 8% to £50,270 and 2% above; self-employed Class 4 6% / 2%. (medium, checked 2026-11-15 · GOV.UK — National Insurance rates and categories (official) · GOV.UK — Self-employed National Insurance rates (official))
- US-GB.SAVING — Saving clause. The U.S. taxes its citizens regardless of the treaty; Article 24 decides who credits whom. (medium, checked 2026-11-15 · IRS — U.S. income tax treaties A to Z (U.K. convention of 2001 and technical explanation) (official) · US citizens in the UK — treaty credit order)
- US-GB.ART24 — Article 24: credit order. UK-source income: UK taxes first, U.S. credits. U.S. dividends: U.S. taxes first up to 15%, UK credits, U.S. credits UK tax above it. (medium, checked 2026-11-15 · IRS — U.S. income tax treaties A to Z (U.K. convention of 2001 and technical explanation) (official) · US citizens in the UK — treaty credit order)
- US.FTC — Foreign Tax Credit. Foreign income tax on foreign-source income is credited against U.S. tax (Form 1116), by category (general, passive). Excess credits carry forward 10 years. (high, checked 2026-11-15 · 26 U.S.C. §901 — foreign tax credit (official) · IRS — Instructions for Form 1116 (Foreign Tax Credit) (official))
- US.FEIE.2026 — Foreign Earned Income Exclusion. Up to $132,900 of foreign wages or self-employment income excluded in 2026 (Form 2555). Not available for pensions or investment income. (high, checked 2026-11-15 · IRS — Rev. Proc. 2025-32 (inflation adjustments for 2026) (official) · IRS — Instructions for Form 2555 (Foreign Earned Income) (official))
- GB.SAVINGS — Savings income. Taxed at your band rate after the Personal Savings Allowance (£1,000 basic, £500 higher, £0 additional). Rates rise 2 points from April 2027. (medium, checked 2026-11-15 · GOV.UK — Tax on savings interest (official) · GOV.UK — Changes to tax rates for property, savings and dividend income (policy paper) (official))
- US.NIIT — Net Investment Income Tax. 3.8% on interest, dividends, gains and rent when MAGI exceeds $200,000 single / $250,000 joint / $125,000 separate. Wages, pensions and Social Security are not investment income. (high, checked 2026-11-15 · 26 U.S.C. §1411 — net investment income tax (official))
- US.NIIT.NOCREDIT — No foreign tax credit against NIIT. Federal Circuit, Aug 31 2026 (Bruyea, Christensen): treaty credits cannot reduce the NIIT, including under the French treaty. Further review may still be possible, so review any treaty-based position with an adviser. Contested Xpat's reading: Xpat applies the Federal Circuit decisions: the 3.8% is added on top and never credited. The Court of Federal Claims had ruled the other way, and further review may still be sought. (high, checked 2026-11-15 · Fed. Cir. — Estate of Bruyea v. United States, No. 2025-1563 (Aug. 31, 2026) (official) · EY — Federal Circuit: no FTC against NIIT (Aug 2026) · RSM — Christensen and Bruyea reversed: what taxpayers abroad should do (Nov 2026))
- US.QUALIFIED.2026 — Qualified dividends and long-term gains. 0% / 15% / 20%. Single: 15% from $49,451, 20% from $545,501. Joint: 15% from $98,901, 20% from $613,701. (high, checked 2026-11-15 · IRS — Rev. Proc. 2025-32 (inflation adjustments for 2026) (official) · 26 U.S.C. §1 — tax rates, including capital gains rates in (h) (official))
- GB.DIVIDENDS.2026 — UK dividend tax 2026/27. 10.75% / 35.75% / 39.35% above a £500 allowance. (high, checked 2026-11-15 · GOV.UK — Tax on dividends (official) · GOV.UK — Changes to tax rates for property, savings and dividend income (policy paper) (official))
- GB.CGT.2026 — UK CGT. 18% / 24% above £3,000. (high, checked 2026-11-15 · GOV.UK — Capital Gains Tax rates (official))
- US.FBAR — FBAR (FinCEN 114). Foreign financial accounts above $10,000 in total at any time. (high, checked 2026-11-15 · FinCEN — Report of Foreign Bank and Financial Accounts (FBAR) (official))
- GB.SA — Self Assessment. A return is needed for income not fully taxed through PAYE (foreign income, rent, self-employment, gains above the thresholds) and to claim FIG. Since 2024/25, high PAYE-only income alone no longer requires one. Register by 5 October, file online by 31 January. (high, checked 2026-11-15 · GOV.UK — Check if you need to send a Self Assessment tax return (official))
- US.NRA.SPOUSE — Non-U.S. spouse. Married to a non-U.S. person: file separately, or elect to treat the spouse as resident and bring their worldwide income in. (high, checked 2026-11-15 · 26 U.S.C. §6013 — joint returns, election for a nonresident spouse in (g) (official))
- US.TOTALIZATION — Social security totalization. The U.S. has agreements with France and the UK: you pay into one system only (usually where you work). (high, checked 2026-11-15 · SSA — International social security agreements (official))