For Americans living in the United Kingdom, U.S. tax terminology can feel confusing — especially when it involves a spouse, business partner or family member who is not a U.S. citizen.
One of the most misunderstood terms is “non-resident alien.”
It sounds like an immigration label, but it is not. It is a U.S. tax classification, and it can directly affect how your household files, what income gets reported and how much tax is withheld on U.S. payments.
For many U.S. expats in the UK, this status comes into play through marriage, shared finances or cross-border work.
Non-Resident Alien: A Tax Definition, Not an Immigration Status
In U.S. tax terms, a non-resident alien (NRA) is someone who:
That’s it.
It does not describe visa status, nationality in the UK, or where someone permanently lives.
It only determines how the IRS taxes that person.
This distinction is important in the UK, where many American expats are married to British or other non-U.S. spouses and manage joint finances.
Why This Matters for U.S. Expats in the UK
In everyday expat life, this classification appears more often than people expect.
Common situations include:
Each of these can trigger U.S. tax questions where the non-resident alien status determines the correct filing approach.
How the U.S. Taxes Citizens vs. Non-Resident Aliens
Here is the key difference:
U.S. citizens and Green Card holders
Non-resident aliens
That difference affects:
UK Tax Residency and U.S. Status Are Not the Same
It is very common for someone to be:
Each country has its own residency rules.
So in a typical U.S.-UK household:
Understanding that separation prevents major filing mistakes.
How the IRS Decides if Someone Is a Non-Resident Alien
The IRS does not look at where someone “feels” they live.
Instead, it applies two tests:
1. The Green Card Test
If a person has a Green Card, they are generally a U.S. tax resident.
2. The Substantial Presence Test
If they do not have a Green Card, the IRS counts the number of days spent physically in the United States over multiple years.
This is where surprises happen for UK-based families who:
Someone can become a U.S. tax resident without realizing itsimply by crossing the day-count threshold.
Does Marriage to a U.S. Citizen Change a Spouse’s Status?
No. Marriage alone does not make a UK spouse a U.S. tax resident.
However, it does create filing choices, and those choices have consequences.
Some couples consider an election to:
👉 Treat the non-resident alien spouse as a U.S. tax resident
👉 File a joint U.S. tax return
This can:
Help in some cases:
But it can also:
This is not a decision to make casually, especially in the UK where pensions, ISAs and investment accounts have complex U.S. treatment.
The 30% Withholding Rule — Why It Comes Up
Many non-resident aliens are subject to a default 30% U.S. withholding rate on certain types of U.S.-source income, such as:
However, the U.S.–UK tax treaty often reduces this rate — but only if the correct paperwork is filed.
Without proper documentation:
➡ The higher withholding can apply automatically
➡ Even if the treaty allows a lower rate
Common Mistakes in U.S.–UK Mixed-Status Marriages
One of the biggest problems is choosing a filing method without understanding what it triggers.
For example:
A U.S. citizen in London files jointly with a UK spouse to “keep things simple.”
But that decision may:
Fixing this later can be expensive and complicated.
Why Professional Guidance Matters More in the UK
The UK has:
Because of this, residency classification and filing strategy must be coordinated carefully.
A cross-border tax professional can:
Most importantly, it helps avoid the common expat scenario:
Filing one way, discovering it was wrong, and paying again to fix it.
The Bottom Line for U.S. Expats in the UK
The term “non-resident alien” is not just technical language.
It determines:
For Americans in the UK — especially those married to non-U.S. spouses — understanding this classification early prevents costly mistakes and keeps your cross-border finances running smoothly.
