Americans moving to London

ProjectGTFO's picture
Rank: Orangutan | 295

Hi all - has anyone here ever moved from The US to London for a job transfer? I have the possibility of doing so, and was curious what people's experience was like.

What were the pros and cons?
What was your favorite part about moving, what did you miss the most or hate?
How is living in London different than living in a city like NY?
How annoying was it to deal with the actual move?
Where did you end up moving?
How did you deal with taxes as a US citizen living in the UK?

Anything else that you think would be relevant would be great to discuss!

Comments (15)

Jul 22, 2020
ProjectGTFO:

How did you deal with taxes as a US citizen living in the UK?

This can be a big one. The US is one of only two countries on the planet that engages in citizen-based, or double, taxation. There are routes to combat this, through foreign tax credits and foreign earned income exclusions, but I'm far from a tax expert, let alone a foreign tax expert.

Jul 22, 2020

Prettu sure your UK tax rate would be above your US tax, thus you don't have to pay it. At least this is what was said from an MD who's from the US.

Jul 22, 2020

That is generally correct. However, keep in mind that even though there's a tax treaty between the countries that in theory should ensure you aren't doubled taxed, in practice there are some circumstances where there are issues, particularly with the AMT on dividend and cap gain which stupidly only applies when you are married. For example, an american citizen residing in the UK realizing a capital gain in the US as a single filer would pay taxes for the gain on their UK taxes, but since the rate on cap gain is higher in the UK (28% vs. 15%), there would be not US taxes. However, a married filler would have to deal with the AMT which would take the overall rate in the mid thirties.

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Jul 22, 2020

@Compbanker

Jul 23, 2020

Gotta do it like this: @CompBanker

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Most Helpful
Jul 24, 2020
ProjectGTFO:

Hi all - has anyone here ever moved from The US to London for a job transfer? I have the possibility of doing so, and was curious what people's experience was like.

Mine wasn't a job transfer .. it was an entirely new job. That said, I have friends who have transferred from NYC to London within investment banking and consulting.

ProjectGTFO:

What were the pros and cons? What was your favorite part about moving, what did you miss the most or hate? How is living in London different than living in a city like NY?

If you enjoy being in a multi cultural environment, you're going to love London. The percentage of people from all over the world is staggering. If you want to play a pickup football (soccer game), expect to have 5-10 different countries represented for 15 people. You cannot walk down the street without hearing Italian, French, Arabic, Mandarin, Romanian, and a whole host of other languages. Most everyone has a fascinating story to tell about how they ended up in London and nearly everyone I've encountered has spent considerable amount of time living in various cities throughout Europe. I know that many people consider NYC to be diverse, but London is on a whole different level.

In terms of things to hate, there are a bunch of inconveniences but nothing that I would say I hate. Food doesn't have preservatives, so anticipate going to the grocery story every few days if you don't eat out often. You won't recognise the majority of the brands. You have to re-train yourself to deal with vehicles on the other side of the road and go through the whole drivers license process again. Oh, and it rains ... often. You've been warned.

ProjectGTFO:

How annoying was it to deal with the actual move?
Where did you end up moving?

I found the move extremely easy. That said, I have moved many times in my life and don't have a lot of miscellaneous "things" that needed to be packed and transferred. Rather than use a moving company, I just packed things up in a large number of suitcases and paid the extra baggage fees, which was more than the cost of the flight itself. This was made easier by the fact that I didn't move any of my furniture, kitchen things, etc. I donated half my wardrobe and purged nearly everything else. Many flats in London come fully furnished and I highly recommend you go this approach, it will simplify your life, although it comes with a price.

In terms of "where" ... people live all over London. Due to the cost of living and desired lifestyle, many people commute into London from 1+ hours away. This is pretty common. If you want to live in Zone 1 be prepared to spend a fair amount on rent. Many buildings are old and lack things such as air conditioning, so don't expect to see many luxury highrises like you might in many US cities.

Finally, you're going to encounter all sorts of annoying "setup" expenses and frustrations. A local telephone is one of them:
- Want a phone subscription? Too bad, you have no established credit score in the UK and need to start with a pay-as-you-go plan.
- Want to chat with your friends in the US? Expect them to have no ability to call an international phone number and you don't have a phone subscription so you're limited on data calls!
- Looking to transfer money between bank accounts? Sorry, your US bank doesn't know what a sort code is and you have to pay fees for each international wire.
- Expecting an important piece of mail such as tax forms? You may need to have all your mail forwarded to your parents' house and ask them to open and scan it to you.
- Brought your US devices with you to the UK? Prepare to buy all new cables so that your Sonos speaker can be plugged into the UK electric outlets.
- Want to buy something in the App store? Sorry, you have a US app store account, need to switch it over to the UK app store. Then you try watching local sports on your Apple TV but your Apple TV thinks it is still in the US so you can watch ESPN but Sky Sports won't download....

Anyways, these are silly little inconveniences, but prepare to encounter a LOT of them. If you aren't super laid back, you will get frustrated. So take a deep breath and enjoy the fact that you're building character!

ProjectGTFO:

How did you deal with taxes as a US citizen living in the UK?

You'll very likely want to file as a non-domiciled resident to minimize taxes. Either way, be prepared to take a hit. Tax rates are unfavourable compared to the US. Additionally, while tax treaties are in place, there is leakage as it pertains to carried interest earned in the US while you're living in the UK. Basically -- if you still have carry and it pays out after you've moved, you cannot bring the money into the UK without paying combined US + UK taxes of about 82%. Assume you won't have access to this money...

Many Americans set up offshore bank accounts (or so I was told by an American friend). If you end up traveling, you won't pay taxes on the days that you are outside the UK, so many people track precisely which days they are traveling for tax return purposes. I recommend Barclays International for an account. You can set this up even if you live in the US. Note: this is not illegal. I know a lot of people hear "offshore bank account" and think of bad things, but these accounts are totally legitimate. Here is a link. https://international.barclays.com/

ProjectGTFO:

Anything else that you think would be relevant would be great to discuss!

Expect a paycut if you aren't treated as an expat. Everyone I've spoken with in London is getting paid substantially less than they would in the states. IB / PE doesn't matter. If you want to live here, this is something you just need to accept.

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Jul 29, 2020

Super helpful and appreciate all the details here. I had a few follow ups:

CompBanker:

Food doesn't have preservatives, so anticipate going to the grocery story every few days if you don't eat out often.

Sounds like a pro to me.

CompBanker:

This was made easier by the fact that I didn't move any of my furniture, kitchen things, etc.

How hard is it if you do move things like that? Do you get a storage container?

CompBanker:

- Want a phone subscription? Too bad, you have no established credit score in the UK and need to start with a pay-as-you-go plan.
- Want to chat with your friends in the US? Expect them to have no ability to call an international phone number and you don't have a phone subscription so you're limited on data calls!

Doesn't WhatsApp solve this issue?

CompBanker:

You'll very likely want to file as a non-domiciled resident to minimize taxes. Either way, be prepared to take a hit. Tax rates are unfavourable compared to the US. Additionally, while tax treaties are in place, there is leakage as it pertains to carried interest earned in the US while you're living in the UK. Basically -- if you still have carry and it pays out after you've moved, you cannot bring the money into the UK without paying combined US + UK taxes of about 82%. Assume you won't have access to this money...

Holy shit. If people make a longer term move what do they do with the carry they receive? Kind of ridiculous that you might generate a lot of money in carry but not have access to it until you move back to the US (or can only use the cash to make investments out of a US account).

CompBanker:

Everyone I've spoken with in London is getting paid substantially less than they would in the states. IB / PE doesn't matter. If you want to live here, this is something you just need to accept.

I've seen this to be the case, but after speaking to some recruiters they said the pay would be the same as an expat. So overall it sounds like making a move to London is a bad idea because comp goes down, taxes go up, and you're more restricted in what you can do with your $, and it's not like London is significantly cheaper than NY. Sounds like a bad financial decision, but more of a personal decision.

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Jul 29, 2020

Just curious- why are salaries so much lower? I'm in tech and the salaries are nearly half compared to the Bay Area. I expected a little drop but not half. It sounds like the COL is roughly the same too.. just wondering how this works out for quality of life in the UK

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

Jul 25, 2020

These types are easy to spot when they come back to NYC. They derive a silly sense of superiority because they now wear pink socks and read the FT. The more redneck their background, the more affected the Eurotrashiness to try and make up for their rural upbringing.

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Jul 29, 2020

Shoreditch is the East Village of NYC, except that it's really clean and the cocktails match the quality of expensive cocktail bars and are much cheaper.

Array

Aug 5, 2020
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