International families and globally mobile individuals increasingly hold assets and operate businesses across multiple jurisdictions.

While having an international footprint creates opportunity and flexibility, it also introduces complexity into any tax, estate and succession planning, particularly where the US or UK is involved.

Cross-border wealth planning rarely allows for the consideration of one country's tax and legal system in isolation. A myriad of factors impact the creation of an effective wealth plan –for example, tax residency, citizenship, asset location and legal structures must be closely considered. Decisions made for commercial or personal reasons in one jurisdiction can have unintended consequences in another, making coordination and timing critical.

Pre-immigration planning: why timing matters

Pre-immigration planning can often impact long-term outcomes more than any later restructuring.

For non-US individuals looking to relocate to the US:

• Acquiring US tax residency means being taxed on worldwide income and gains, even on the appreciation of assets that relates to prior to becoming a US tax resident
• Where non-US assets and accounts are retained, extensive reporting and potentially taxable "phantom income" can be generated from non-US bank accounts, investment vehicles and trusts, even where no amounts are actually distributed.
• Evaluating how assets and structures are characterised under US rules and effecting any restructuring before any exposure arises can materially affect tax efficiency and compliance burdens.

For individuals with UK connections:

• The timing of when an individual becomes UK tax resident depends on a highly fact-specific statutory residence test.
• Tax exposure can change significantly once UK residence is established.
• Although the introduction of the new Foreign Income and Gains regime can provide additional flexibility, planning opportunities available to non-residents may nonetheless be lost if residence is triggered before structures are reviewed.

Entrepreneurs and founders: planning earlier, not later

Founders often defer personal tax planning while focusing on business growth, but early planning can be particularly valuable.

• Lower early-stage valuations allow greater flexibility for ownership, succession and future liquidity planning.
• Personal holding structures can have lasting consequences for funding rounds, exits and international expansion.
• US and UK reporting regimes can create significant compliance exposure and should be addressed early when the impact of restructuring may be more manageable.

Trusts: familiar tools, unfamiliar outcomes

Trusts remain central to long-term family planning, but US and UK connections introduce complexity that requires careful analysis.

• Outcomes depend on the residence and status of settlors, trustees and beneficiaries, as well as trust terms.
• For trusts with US or UK connections, various rules that can result in the attribution of assets, income and gains, as well as impact the tax treatment of distributions must be closely considered and managed.Recent UK tax changes increase the importance of reviewing existing trusts to ensure they still meet family and succession objectives. 

Residency and “golden visa” programmes

Residency and investment-linked immigration programmes are often pursued for flexibility or access but can trigger unexpected tax consequences.

• Immigration or residency status may trigger tax residency with corresponding tax and reporting obligations.
• A US green card, for example, brings worldwide US tax exposure regardless of time spent in the US.
• Acquiring residency in one location can also affect treaty positions and existing structures in other jurisdictions.

Managing cross-border complexity

Cross-border structuring involves systems that do not always align. Small changes in residence, ownership structures and implementation timelines can have large consequential effects, particularly where the US or UK is involved.

For internationally connected families, founders and investors, careful planning at key transition points such as relocation, business growth or succession remains essential. If you are dealing with US or UK cross-border structuring issues, please do not hesitate to reach out to our legal experts to discuss the implications for your personal or family arrangements.