Dual citizen resident in UK - Timing of UK tax payments/FTCs

Hi everyone

As a newly UK resident dual citizen, I'm curious how you manage the timing of your UK tax payments relative to the US tax year, in order to claim Foreign Tax Credits in the appropriate year.

For example - having sold our US house, we will have a fair amount of UK interest income in calendar 2025. In theory we could wait to complete our UK return in April, and then pay the tax due. However, I believe that would mean we wouldn't be able to take any credit for that tax in our 2025 US tax return (assuming we don't elect to operate on an accruals basis). That would mean claiming the credit on our 2026 US return, which would likely be filed mid-2027, and so in practice we wouldn't get the benefit of that credit until late 2027.

I also want to keep the US and UK tax payments reasonably aligned, as our sources of income will shift significantly from one year to the next (e.g. drawing from savings one year, sales of investments the next, drawing on a corporate pension the next), so I also don't want to be in a position of having to carry credits forward if there's insufficient income of that type, or having to submit amended returns to carry the credit back a year if at all possible.

Therefore, for anyone in similar situations, do you often pay estimated UK tax on account by the end of the calendar year, so you can claim the credit that year?

Thanks
Martin

On our UK return we make a statement that we are considering the US tax year to be concurrent with the UK tax year to make the tax credits easier to calculate. This means that on our UK return we can simply use the values straight from our 1099s. We file our UK return in the Fall and pay the tax due. We then make estimated payments to the UK in January and July for the following tax year.

We have US ETFs and I always make sure that any sales we make are after April 5th to also keep the capital gains better aligned.

Hello Martin,

I estimate my UK taxes for the current year and make a payment (normally a bit higher than my guestimate ) in that same year.  I file my UK taxes via the online self assessment in April and wait to get confirmation of the tax calculation.  That is normally available pretty quickly after filing.  Once I have my UK taxes completed I file my US taxes.  I actually used Greenback to file my US taxes this year as I had a few unusual taxable events and I wasn't sure how to file to claim the FTC.    Greenback submitted my US taxes and I was able to claim FTC dramatically reduce my US taxes.  Greenback was a little expensive but I think it was worth it for me.  It is a bit of a pain to keep track of everything but pretty easy with simple spreadsheets - I use the UK tax year for my UK taxes and the standard US tax year for my US taxes, but I also make sure that I have minimal transactions occurring between Jan 1 and April 5th in order to keep the majority of  taxable transactions aligned.   Good luck.

Thank you both!

On balance I think I'll go down the path of making estimated UK tax payments during the calendar year, to keep both the income and the tax payments reasonably closely aligned for both countries (similar to QforQ), with the tax returns resolving the estimation differences. I'm not sure we'll be able to use the online self assessment for the UK yet, as we plan to use the new FIG rules at least for a couple of years when most of our income will be US based, as I understand we'll need to disclose the US income (even though it won't be taxed).

Rgds
Martin