Can we make the Section 6013(g) election for just one year and then stop?

Technically yes, but the consequence is permanent. Revoking the election terminates it for all future years and, under Section 6013(g)(6), neither spouse may ever make the election again with the same spouse. Treating it as a one-year trial destroys an option you cannot recover, and every year it was in force remains a year of US residence and US reporting for the non-US spouse.

Does the election make my British spouse liable for US estate tax?

Not directly. Section 6013(g) reaches income tax and wage withholding, not the estate and gift tax regime, and it does not make a non-US spouse a US domiciliary for transfer tax purposes. However, the election changes the practical shape of the couple's planning, and the limits on the marital deduction for transfers to a non-citizen spouse and the qualified domestic trust rules still apply and should be addressed alongside it.

Will my spouse's ISA or SIPP be taxed by the IRS if we elect?

An ISA receives no US recognition and is treated as an ordinary taxable account, with any UK-domiciled funds inside it treated as PFICs subject to the Section 1291 regime unless a QEF or mark-to-market election is available. A SIPP or other UK pension may receive deferral under the US-UK double tax treaty, but the relief is conditional and does not cover every arrangement. Both become reportable regardless of whether they are taxable.

Does my spouse have to file FBARs if we make the election?

Yes. An elected US resident is a US person for FinCEN Form 114 purposes and must report her foreign financial accounts once aggregate balances exceed the statutory threshold, including accounts she only has signature authority over. Form 8938 may also apply under FATCA once the applicable threshold is met. Current thresholds are published on IRS.gov and in the FinCEN instructions.

Is married filing separately always worse than electing?

No. It produces a higher bill on the US spouse's own income because of narrower brackets and lost credits, but that cost is bounded and quantifiable. For couples where the British spouse holds funds, private company shares, a family trust interest or an expected inheritance, the PFIC, trust and reporting costs of electing routinely exceed the separate-filing penalty by a wide margin. The comparison should be modelled on your actual figures.

Our accountant made this election without explaining it. What now?

Establish first whether the election was made under Section 6013(g) or Section 6013(h), since the termination rules differ, and confirm which years it has been in force. Then assess whether the non-US spouse's reporting obligations for those years have been met, because revoking does not cure past non-compliance and the statute of limitations may remain open on unfiled information returns. Take advice before revoking, since the decision cannot be reversed.

Section 6013(g): Electing a Non-US Spouse as Resident

For most mixed-nationality couples with real wealth on the British side, the Section 6013(g) election is a bad trade: it buys one year of joint filing rates and hands the IRS permanent jurisdiction over a spouse who never chose it. The election treats a non-resident alien spouse as a US resident for income tax purposes, which sounds like an administrative convenience and is in fact a change of tax nationality in everything but name. The moment it takes effect, your British spouse's SIPP, ISA, offshore bond, unit trusts, private company shares, rental flat in Fulham and future inheritance from her parents all become visible to, and taxable by, the United States. The election also carries a one-way door: once revoked, neither spouse may ever make it again with the other. This article sets out what the election does, what it costs a couple with substantial separate UK wealth, how it compares with married filing separately supported by a treaty position, and the revocation mechanics that preparers routinely get wrong.

What does the Section 6013(g) election actually do?

Section 6013(g) of the Internal Revenue Code permits a US citizen or resident married to a non-resident alien at the close of the tax year to elect, jointly with that spouse, to treat the non-resident as a US resident for purposes of chapters 1 and 24 — income tax and wage withholding. It is made by attaching a signed statement to a joint return, declaring that the election is being made, identifying both spouses, and confirming the residency status of each. There is no separate form, no filing fee and no IRS approval step. It is one of the least ceremonious decisions in the Code with some of the longest consequences.

The critical word is 'resident'. The election does not merely allow a joint return; it recharacterises the non-US spouse as a US tax resident, and US residents are taxed on worldwide income regardless of source, remittance or where they have ever set foot. Your spouse does not need a green card, a visa, a US address or a single day of US presence. She becomes, by signature alone, a person whose global income the IRS may assess. And the election is not a one-year experiment. Once made, it remains in effect for all subsequent years until it is terminated by one of the events described later in this article.

Practitioners sometimes confuse 6013(g) with its sibling, Section 6013(h), which applies where a non-resident alien becomes a US resident partway through the year and the couple wishes to be treated as full-year residents. The two provisions do different work and carry different termination rules. IRS.gov sets out the statutory statement requirements for both, and it is worth reading them against your own facts rather than relying on a preparer's software default.

Why does the election look so attractive in the first year?

The pull is real and it is arithmetic. A US person married to a non-resident alien who does not elect must file as married filing separately, which is the least generous status in the Code, or in narrow circumstances as head of household. Married filing separately compresses the brackets, restricts or eliminates a range of credits and deductions, and applies a lower threshold before certain surtaxes and phase-outs bite. Joint filing widens the brackets and restores access to items that separate filers lose entirely.

Where the American spouse earns most or all of the household income and the British spouse has little of her own, the election can produce a genuine and recurring reduction in the US bill. That is the fact pattern the provision was written for: a US-earning breadwinner, a foreign spouse with modest independent means, and no offshore complexity worth speaking of. Advisers who recommend the election reflexively are usually pattern-matching to that couple. The trouble is that the couples reading this article are almost never that couple.

The election's attractions typically include the following, and each deserves to be tested against your actual numbers rather than assumed:

Access to joint filing brackets, which are wider than the separate-filer brackets and can meaningfully reduce marginal rates where income is concentrated in one spouse's hands.
Restoration of deductions and credits that are reduced or denied outright to married filing separately filers, including certain education, dependent care and retirement-related items.
A single return rather than two parallel filings, and one set of foreign tax credit computations rather than two, which some couples value for simplicity alone.
The ability to use the non-US spouse's own foreign tax credits and, where the tests are met, foreign earned income exclusion against the joint liability, subject to the usual per-person limitations.
Higher thresholds for certain reporting obligations that apply on a joint-return basis, which can reduce the number of forms — though never the number of assets disclosed.
A cleaner narrative for immigration and mortgage purposes, where a joint US return is sometimes treated as evidence of a bona fide marriage or of household income.

What happens to your spouse's UK pension, ISA and investment wealth?

This is where the election stops being a filing-status question and becomes a wealth question. A British professional's portfolio is, from a US perspective, a collection of landmines. An ISA is not a tax-free account to the IRS; it is a taxable wrapper whose income and gains are reportable, and if it holds UK-domiciled funds it holds passive foreign investment companies. A stocks and shares ISA, a general investment account, a UK unit trust, an OEIC, an investment trust and most exchange-traded funds listed in London are PFICs, taxed under the punitive Section 1291 default regime unless a qualified electing fund or mark-to-market election is available and made — and QEF elections require annual information that most UK fund managers have never produced.

Pensions fare better but not cleanly. The US-UK double tax treaty contains provisions that can defer US taxation on growth inside certain UK pension schemes and coordinate the treatment of contributions and distributions, but the relief is conditional, form-dependent and does not extend to every arrangement a British executive holds. Employer share plans, SAYE schemes, EMI options, growth shares and carried interest in a UK fund all have their own US characterisation problems, and the mismatch between when HMRC taxes an award and when the IRS does can create dry tax charges with no credit to offset them.

Then there is reporting, which is separate from tax and often more dangerous. Once your spouse is a US resident by election, she is a US person for FBAR purposes and files FinCEN Form 114 on her own accounts, including accounts she has held since university and any account over which she merely has signature authority — her mother's account, the PTA account, the family company's account. Form 8938 obligations follow under FATCA once the applicable thresholds are crossed. If she is a beneficiary or settlor of a UK family trust, Forms 3520 and 3520-A enter the picture, with penalty regimes that are assessed first and argued about later. The specific thresholds change and are published on IRS.gov and in the FinCEN instructions; the point is not the number but the fact that a private British life becomes a disclosed one.

For a couple where the British spouse is the wealthier party — an equity partner, a founder with a UK holding company, an heiress to a landed family — the election can convert a modest joint-filing saving into six figures of compliance cost and PFICs taxed at rates that make the original saving look like a rounding error.

Does the treaty solve the problem?

Partially, and less than people hope. The US-UK double tax treaty allocates taxing rights and relieves double taxation, but the saving clause preserves the United States' right to tax its residents — including elected residents — as though the treaty did not exist, subject to enumerated exceptions. Once your spouse elects into US residence, she has volunteered into the class of people the saving clause is aimed at.

Worse, the election and the treaty can conflict. Where a spouse would otherwise be a treaty non-resident of the United States and could claim relief under the residence tie-breaker, the affirmative choice to be treated as a resident undercuts that position for many purposes. Advisers sometimes propose making the election and then filing a treaty-based return position under Section 7701(b) or the relevant treaty article to switch it off for specific items. That can work in narrow cases, but it is technically fraught, invites examination, and requires Form 8833 disclosure. Building a plan on a treaty position that contradicts an election you voluntarily made is not a plan; it is a wager. GOV.UK and IRS.gov both publish the treaty text and the technical explanation, and the saving clause repays a careful reading before anything is signed.

How do inheritances and family gifts get caught?

British families transfer wealth through mechanisms the US tax system treats with suspicion. An inheritance from a UK parent, received by a person who is a US resident by election, is not itself US-taxable income — but the reporting is mandatory, and where the inheritance arrives via a trust, an interest in possession, or a will trust that continues after death, the US foreign trust rules apply in full. Form 3520 becomes an annual reality, and the throwback rules can tax accumulated trust income at rates that erase decades of compounding when a distribution is eventually made.

Beyond the estate, the election also affects estate and gift planning while everyone is alive. It does not, by itself, make the non-US spouse a US domiciliary for transfer tax purposes — Section 6013(g) reaches income tax, not estate and gift tax — and that distinction is one of the most commonly misstated points in this area. But the practical effect of pulling a spouse's assets into US visibility, combined with the limits on the marital deduction for transfers to a non-citizen spouse and the machinery of the qualified domestic trust, means that estate planning for the couple has to be rebuilt around the election rather than beside it. A UK will drafted by a solicitor who has never met a QDOT will not survive contact with the result.

What does married filing separately actually cost?

The alternative is straightforward and, for wealthy mixed couples, usually superior: the American spouse files married filing separately and reports only her own income, and the British spouse remains a non-resident alien with no US filing obligation beyond any US-source income she happens to have. Her SIPP stays a SIPP. Her ISA stays an ISA. Her family trust stays out of Form 3520. The IRS never learns her account numbers.

The costs of this route are real but bounded, and they should be quantified rather than feared:

Narrower brackets and the loss of certain deductions and credits for the US-filing spouse, which raises the US bill on her income alone — usually the single largest identifiable cost of not electing.
Careful segregation of assets, so that jointly held accounts, joint brokerage positions and shared property do not drag the non-US spouse's wealth into the US spouse's reporting through ownership attribution or signature authority.
Attention to community property principles if the couple has ever been resident in a community property jurisdiction, which can require income splitting even on separate returns.
Discipline around gifts between spouses, since transfers to a non-citizen spouse are limited by an annual inflation-adjusted exclusion rather than the unlimited marital deduction available between citizens.
Ongoing analysis of whether the US spouse qualifies for head of household status, which is available in specific circumstances and softens the separate-filer penalty considerably.
Coordination with UK filing, since the British spouse's HMRC position, remittance basis history if any, and domicile status all interact with the couple's overall exposure — GOV.UK is the authority on current UK thresholds and elections.

How is the election revoked, and why is that the trap?

The election continues indefinitely until terminated, and there are only a handful of ways it ends: revocation by either spouse, death of either spouse, legal separation under a decree of divorce or separate maintenance, inadequate records where the IRS terminates for failure to substantiate, or a revocation filed on time by one spouse acting alone. Revocation is made by filing a signed statement with the Service and must be made by the due date for filing the return for the first year to which the revocation is intended to apply; miss the deadline and you are electing for another year whether you meant to or not.

Here is the part preparers get wrong. Section 6013(g)(6) provides that once the election has been terminated by any of these means with respect to a couple, neither spouse may make the election again with the other spouse. Not in a better year. Not after circumstances change. Not after a rate cut makes joint filing attractive again. It is permanent as to that marriage. Couples who elect casually during a low-income year, revoke when the British spouse's company is sold, and then discover they cannot re-elect during retirement have destroyed an asset they never valued. Note too that termination is asymmetric in a way that surprises people: one spouse can revoke unilaterally, and the consequence binds both, forever.

There is a second, quieter trap. Revocation does not undo the past. Every year the election was in force remains a year of US residence for the British spouse, with the reporting obligations that came with it. Unfiled FBARs from those years do not evaporate on revocation; they sit there, with an open statute of limitations, waiting.

What should a couple with substantial UK wealth do?

Model it before you sign it, and model it over a lifetime rather than a filing season. The right analysis compares the joint-filing saving, projected across a realistic range of years, against the full cost of bringing the British spouse's balance sheet into the US system: PFIC computations or QEF elections on every fund holding, treaty analysis on every pension, FBAR and Form 8938 preparation, trust reporting on any family structure, the estate planning rebuild, and the option value of an election that can never be made again once surrendered.

In our experience with founders, fund principals and business owners, the election makes sense where the US spouse earns nearly all the income, the non-US spouse's separate wealth is genuinely modest and free of funds and trusts, and there is no realistic prospect of a UK inheritance or liquidity event. Where the British spouse has an ISA portfolio, a family trust, shares in a private company, or parents with an estate, the election is almost always the wrong instrument, and married filing separately with disciplined asset segregation and a properly documented treaty position is the better structure. The decision should also be revisited before any liquidity event, before any inheritance is expected, and before any relocation in either direction.

Current figures — brackets, reporting thresholds, exclusion amounts and penalty levels — change annually and should be taken from IRS.gov and GOV.UK rather than from any article, including this one. The mechanics described here do not change; the numbers do. If you are contemplating this election, or discovering that a previous preparer made it on your behalf without explaining what it did, take advice on your own facts before the next filing deadline passes and the decision makes itself.