Do US citizens need a sailing permit to move to the UK?

No. The IRS departure clearance applies only to aliens, meaning resident and nonresident non-citizens. US citizens, including dual US-UK citizens, never need a sailing permit. They instead remain within the US tax system after moving to the UK, filing Form 1040 each year on worldwide income, reporting UK accounts on the FBAR and, where thresholds are met, Form 8938, and claiming foreign tax credits or the foreign earned income exclusion to relieve double taxation.

How far in advance should I apply for an IRS sailing permit?

The IRS says you should obtain the permit at least two weeks before you plan to leave, and you cannot apply earlier than 30 days before your planned departure date. Appointments are made by calling the IRS line listed on its Departing Alien Clearance page and are held at a Taxpayer Assistance Center. Because appointment availability varies by location, call as soon as the 30-day window opens rather than waiting until the last fortnight.

Is Form 1040-C my final US tax return when I leave?

No. The IRS instructions state that Form 1040-C is not a final return. You must still file an annual return after the tax year ends, usually a dual-status Form 1040-NR with a Form 1040 statement if your residency ended during the year. Tax paid with Form 1040-C is credited on that annual return, and any overpayment is refunded only to the extent the annual return shows one.

Will HMRC tax the US salary I earned before returning to the UK?

Not if split year treatment applies. If you are UK resident for the tax year of return and meet one of the arrival cases in HMRC's Statutory Residence Test guidance, the year is split into an overseas part and a UK part, and US salary earned in the overseas part is generally outside UK tax. Split year treatment is not automatic: it is claimed on form SA109 filed with your Self Assessment return.

How are RSUs that vest after I return to the UK taxed in the US?

RSUs and bonuses that relate to work performed partly in the United States are generally US-source income in proportion to the US workdays in the period the award relates to. That portion can require a US Form 1040-NR in a later year even if you were not in the US at all. The UK may tax the same income, so relief is coordinated under the US-UK treaty and each country's credit rules, using consistent day counts on both returns.

US UK Tax Returns Preparation: The Sailing Permit

Q: Do green card holders returning to the UK need a sailing permit?

Generally yes, because a green card holder is a resident alien and is not within the exempt categories. However, the permit does not end your green card or your US tax residency. Residency under the green card test continues until status is formally abandoned, typically by filing Form I-407, or revoked. Long-term residents should also check whether the expatriation rules and Form 8854 apply before abandoning status.

For a UK national heading home after a US posting, US UK tax returns preparation starts before the flight, not after it: most resident and nonresident aliens must obtain an IRS departure clearance, commonly called a sailing permit, before they leave the United States. You get it by filing Form 1040-C or Form 2063 in person at an IRS office, at least two weeks and no more than 30 days before departure. US citizens do not need a sailing permit at all. The permit is only the first of three filings in a move home: the departure return, the final-year US income tax return, and your first UK Self Assessment return as a returning resident.

This guide is written for the people we see most often in this position: investment bankers and fund professionals finishing a US secondment, executives on L-1 or E-2 visas, and UK-born green card holders who have decided to return to London permanently. In the returns we prepare for these clients, the sailing permit itself is rarely the expensive part. The expensive part is getting the permit, the dual-status US return and the UK arrival year to tell the same story about when you stopped being US resident and when you became UK resident again.

What Is an IRS Sailing Permit?

A sailing permit is a certificate of compliance signed by the IRS confirming that, on the information available, a departing alien has settled his or her US income tax obligations. The IRS describes it on its Departing Alien Clearance page at https://www.irs.gov/individuals/international-taxpayers/departing-alien-clearance-sailing-permit as proof that you have settled your US tax liabilities before a planned, long-term or permanent departure. Both Form 1040-C (US Departing Alien Income Tax Return) and Form 2063 (US Departing Alien Income Tax Statement) contain a certificate of compliance section. Once an IRS employee signs it, your copy of the signed certificate is the permit.

The name is a historical relic from the era of ocean liners, and the term departure permit is used interchangeably. Nothing about it relates to boats. It applies equally whether you leave by air, sea or land, and it is a tax document, not an immigration document: US Customs and Border Protection does not issue it, and it has nothing to do with your visa or your passport stamp.

Who Must Get a Sailing Permit, and Who Is Exempt?

The default rule in IRS Tax Topic 858 at https://www.irs.gov/taxtopics/tc858 is that any resident or nonresident alien departing the United States must obtain a departure permit unless an exemption applies. For UK nationals, that default captures most people finishing a working stint in the US. The exempt categories are narrow and, broadly, are:

Representatives of foreign governments holding diplomatic passports, and members of their households and staff
Employees of international organisations and foreign governments whose pay is exempt from US tax and who have no other US-source income
Students, trainees and exchange visitors on F-1, F-2, H-3, H-4, J-1, J-2 or Q visas whose only US income falls within specified categories such as allowable scholarship or on-campus and practical-training pay
M-1 and M-2 students with only limited, specified income
Certain temporary visitors on B-1, B-2 or C-1 visas, or holding border crossing cards, with no taxable income, and certain military trainees on official travel orders
Residents of Canada or Mexico who commute to US work and whose wages are subject to withholding

Notice who is not on that list: a UK banker on an L-1 intra-company transfer, a UK founder on an E-2 treaty investor visa, an H-1B professional, or a UK national holding a green card. Each of these is an alien with US taxable income, so the exemptions do not apply. The IRS page flags that the exact conditions of each category matter, so a J-1 researcher who also earned consulting income, for example, can fall out of the exemption.

US citizens, including dual US-UK citizens, never need a sailing permit. The departure clearance regime applies only to aliens. A dual national who holds a US passport has a different set of obligations on moving to the UK: continuing to file Form 1040 every year on worldwide income, FBAR and Form 8938 reporting on UK accounts, and claiming foreign tax credits or the foreign earned income exclusion. That is a lifelong filing relationship rather than a one-off clearance.

Form 1040-C or Form 2063: Which One Applies to You?

The Instructions for Form 1040-C at https://www.irs.gov/instructions/i1040c set out the choice. Form 2063 is the short statement, and it can be used only if you had no taxable income for the year of departure and the preceding year, or if you are a resident alien with taxable income and the IRS has decided that your departure will not hinder collection of the tax. Everyone else files Form 1040-C.

In practice, a UK national who has been drawing a US salary will almost always complete Form 1040-C, because there is taxable income in the year of departure. Form 2063 is more commonly seen for resident aliens leaving temporarily, such as a green card holder taking a short overseas assignment who fully intends to come back, and for people with no US taxable income at all. When we prepare these filings we plan for Form 1040-C and treat a 2063 outcome as a bonus that the IRS officer decides, not the taxpayer.

Form 1040-C asks you to report all income received, or reasonably expected to be received, for the entire tax year, and to compute the tax on it. If you are a resident alien you use the Form 1040 rules to complete it; if you are a nonresident alien you use the Form 1040-NR rules. That distinction matters for UK nationals whose status changes mid-year, which is the dual-status problem discussed below.

When and How Do You Apply for the Permit?

Timing is fixed by the IRS. According to the IRS departing alien page, you should apply at least two weeks before you plan to leave, and you cannot apply earlier than 30 days before your planned departure date. That creates a roughly two-week window, and for a banker whose last day in the New York office is set by a deal calendar, that window can be tight.

The permit is issued in person by appointment at an IRS Taxpayer Assistance Center. As of today, the IRS page directs departing aliens to call 844-545-5640 between 7 a.m. and 7 p.m. local time to schedule the appointment. Appointment availability varies by location and season, and the IRS does not publish a guaranteed turnaround, so we tell clients to call on the first day the 30-day window opens rather than waiting for the two-week mark. If you are married and your spouse also needs a permit, both of you should attend. Tax Topic 858 also notes that residents of community property states should bring their spouse's documents even if the spouse does not need a permit.

What Documents Should You Bring to the IRS Appointment?

The IRS lists the paperwork in Tax Topic 858. Arriving without it is the single most common reason a departure appointment fails. Bring originals where you have them and copies of everything:

A valid passport and your alien registration card (green card) or visa
US income tax returns filed for the past two years, with receipts or proof of payment of the tax
Documents showing your deductions, such as state tax and mortgage interest records
Employer statements of wages paid and tax withheld for the year to date, and a letter from your employer confirming compensation expected until departure
Proof of estimated tax payments for the past year and the current year
Documents relating to any US property you have sold, or intend to sell, in the year
Documents supporting any tax treaty position you rely on, and any scholarship or fellowship grant records
Evidence of your planned departure date, such as an airline ticket or a letter from your employer confirming the transfer
Proof of your taxpayer identification number, usually your Social Security card

For investment bankers and senior executives, the missing item is almost always a clear statement of deferred compensation: unvested RSUs, deferred cash awards and the expected year-end bonus. The officer is asking what you will receive in the tax year, and a vague answer invites a longer conversation. We prepare a one-page compensation schedule, reconciled to the employer's payroll projection, and attach it to the 1040-C working papers.

Do You Have to Pay Tax Before You Leave?

Generally, yes. The IRS page states that when you file Form 1040-C you must pay all tax shown as due, plus any tax owed for earlier years. The Form 1040-C instructions add that the IRS may allow you to furnish a bond guaranteeing payment instead of paying the tax for certain years. For a salaried employee whose employer has withheld federal tax all year, the balance due on Form 1040-C is often small or nil, because withholding is credited against the computed liability.

The reverse is not true. If Form 1040-C shows an overpayment, you do not get a refund at the appointment. The Form 1040-C instructions state that any overpayment will be refunded only if and to the extent your final return for the tax year shows an overpayment. The 1040-C is a clearance computation, not a settlement.

Is Form 1040-C Your Final US Tax Return?

No, and this is the misunderstanding we most often have to unwind. The Form 1040-C instructions say plainly that it is not a final return and that you must file a final income tax return after your tax year ends. Tax paid with the 1040-C is claimed as a credit on that annual return. The IRS departing alien page repeats the point: the 1040-C is not an annual US income tax return.

The failure mode we see most often goes like this. A UK secondee files a 1040-C in October, pays a small balance, flies to London in November, and assumes the US chapter is closed. The following spring no Form 1040-NR or Form 1040 is filed. The IRS then has a departure return showing expected income, W-2s and 1099s showing actual income, and no annual return. By the time the letter reaches a UK address, the taxpayer has a delinquent return, possible penalties, and, if a year-end bonus was paid after departure, unreported income. Proper US UK tax returns preparation treats the 1040-C as step one of a sequence and diarises the annual return the day the permit is signed.

US UK Tax Returns Preparation for the Dual-Status Final Year

A dual-status tax year is one in which you are a resident alien for part of the year and a nonresident alien for the rest. Many UK nationals who leave mid-year are dual-status in the year of departure, but only if their US residency actually ends before 31 December. That depends on which residency test made them US resident in the first place.

If you were resident under the substantial presence test, the IRS page on residency dates at https://www.irs.gov/individuals/international-taxpayers/residency-starting-and-ending-dates says your residency normally continues to 31 December of the departure year, unless you can show that for the rest of the year your tax home was in a foreign country and you had a closer connection to that country than to the United States. A returning UK banker with a London employer, a UK home and family in the UK will usually meet that standard for the period after departure, but it has to be claimed. You do so by attaching a residency termination statement, signed under penalties of perjury, giving your name, passport details, last day of US presence and the facts establishing your UK tax home and closer connection.

If you were resident under the green card test, residency does not end simply because you board a plane or file a 1040-C. The same IRS page explains that green card residency ends when you voluntarily surrender the card to US Citizenship and Immigration Services and abandon immigrant status (in practice, by filing Form I-407), or when status is rescinded or revoked. A UK national who flies home but keeps the green card in a drawer remains a US tax resident, taxed on worldwide income, until the status formally ends or a treaty tie-breaker position is taken.

Once the residency end date is fixed, the IRS guidance on dual-status taxpayers at https://www.irs.gov/individuals/international-taxpayers/taxation-of-dual-status-individuals sets the mechanics for someone who is a nonresident at year end. You file Form 1040-NR with Dual-Status Return written across the top, and attach a Form 1040 as a statement for the resident period, marked Dual-Status Statement. The restrictions are significant for higher earners:

No standard deduction, so itemised deductions must be substantiated
No head of household status, and generally no joint return unless you are married to a US citizen or resident and make the election to be treated as resident for the whole year
Income for the nonresident period that is not effectively connected with a US trade or business is taxed at a flat 30 percent or a lower treaty rate, with no deductions
The return is generally due by 15 April of the following year if you received wages subject to withholding, and by 15 June if you did not

A married secondee whose spouse is also a UK national should therefore not expect to replicate the married filing jointly result of earlier years. The choice of whether to make a full-year resident election, where available, is a modelling exercise: it can lower the rate on the resident-period income but brings the post-departure worldwide income into the US net. We run both computations before filing.

How Are RSUs and Bonuses Paid After You Leave Taxed?

This is the gap that most online guides skip, and for the audience of this article it is usually the largest number on the return. A bonus paid in February for the prior year's performance, or RSUs that vest a year after you return to London, can relate wholly or partly to work performed in the United States. For US purposes, compensation is sourced by where the services were performed. Where compensation relates to a period that spans your US and UK working time, IRS Publication 519 at https://www.irs.gov/publications/p519 explains that it is generally allocated on a time basis, broadly by the number of days worked in the United States over the period to which the award relates.

The practical consequence is that you may owe US tax, and need to file a Form 1040-NR, in a year when you were not in the US at all, because part of a vesting award is US-source income. Employers do not always withhold correctly on these post-departure payments, especially where the award is delivered through the UK payroll after a transfer. The 1040-C interview is a good moment to identify these awards, because the officer will ask about income reasonably expected in the tax year, and the same schedule becomes the roadmap for later-year nonresident filings.

On the UK side, employment income and share awards earned partly while you were not UK resident are also apportioned by reference to the earning period, and the UK taxes the portion attributable to UK duties or to periods of UK residence. Where both countries tax the same slice, the US-UK income tax treaty (published by the IRS at https://www.irs.gov/businesses/international-businesses/united-kingdom-tax-treaty-documents) and each country's credit rules decide who gives relief. The IRS notes in the Form 1040-C instructions that a dual-resident taxpayer claiming treaty benefits does so on Form 8833. Getting the day-count apportionment identical on both returns is the single most valuable control in a secondment exit.

How Does Your First UK Self Assessment Work After Returning?

The UK tax year runs from 6 April to 5 April, so a November return to London falls in the middle of a UK tax year. Your residence for that year is determined by the Statutory Residence Test, explained in HMRC's RDR3 guidance at https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3. The guidance confirms that spending 183 days or more in the UK in a tax year makes you resident, and that otherwise the automatic overseas tests, the home test and the sufficient ties test decide the position.

Most returning secondees end up UK resident for the tax year of return. Without relief, that would mean worldwide income for the whole UK tax year, including US salary earned in the months before the move, falling within UK tax. Split year treatment prevents that where one of the statutory cases applies. The RDR3 guidance explains that Cases 1 to 3 cover people leaving the UK and Cases 4 to 8 cover people arriving, with detailed conditions in HMRC's manual at RFIG21000. The arrival cases broadly cover people who start to have their only home in the UK, start full-time work in the UK, return after full-time work overseas (and their accompanying partners), or start to have a home in the UK. Where a case applies, the tax year is split into an overseas part and a UK part, and the overseas part is generally treated as non-resident for most income.

Split year treatment is claimed on the residence pages, Form SA109, filed with your Self Assessment return (see https://www.gov.uk/government/publications/self-assessment-residence-remittance-basis-etc-sa109). If you were not already registered for Self Assessment, you will need to register with HMRC; general guidance on UK residence and foreign income is at https://www.gov.uk/tax-foreign-income/residence. The UK arrival date you choose for split year purposes and the US residency termination date on your dual-status return should reconcile. We have seen HMRC and IRS enquiries both begin from a mismatch between a split year arrival date in one country and a residency termination date weeks later in the other.

Worked Scenario: A London Banker Ending a New York Secondment

The following is an illustration only; the figures and dates are assumed for the example. Alex, a UK national, moved from London to New York on an L-1 visa in January 2024 to work for the US affiliate of a UK bank. Alex is a resident alien under the substantial presence test. The secondment ends and Alex will fly back to London on 15 November 2026 to rejoin the London office, having bought a flat there in October.

Step one, the permit. The 30-day window opens on 16 October 2026. Alex calls the IRS appointment line that day and secures an appointment in late October, comfortably more than two weeks before departure. Alex brings the passport, L-1 documentation, the 2024 and 2025 returns, year-to-date payroll figures, an employer letter confirming the transfer date and expected pay to 15 November, and a schedule showing an expected 2026 bonus to be paid in February 2027 and RSU tranches vesting in 2027 and 2028. Because Alex has taxable income, Form 1040-C is completed. Federal withholding covers the computed liability, and the IRS officer signs the certificate of compliance.

Step two, the US annual return. Alex attaches a residency termination statement to the 2026 return showing a last US day of 15 November, a UK tax home and a closer connection to the UK from that date. Alex files Form 1040-NR marked Dual-Status Return, with a Form 1040 statement for 1 January to 15 November. Because Alex received wages subject to withholding, the return is due by 15 April 2027. The February 2027 bonus relates to 2026, when roughly the first ten and a half months of work were in New York, so the US-source portion is identified by day count and reported on a 2027 Form 1040-NR, with the UK taxing it as well and relief coordinated under the treaty and credit rules. The same exercise is repeated for each RSU vest.

Step three, the UK return. Alex is UK resident for 2026-27 and qualifies for split year treatment under an arrival case, with the UK part beginning on arrival. Alex registers for Self Assessment and files the 2026-27 return with SA109, claiming split year treatment. The New York salary for April to mid-November 2026 falls in the overseas part. The US residency end date and the UK split year start date line up, which is exactly what both tax authorities will look for.

Green Card Holders Returning to the UK: What Changes?

UK-born green card holders need the sailing permit in the same way as visa holders, but the sequencing is different. The permit does not terminate your green card and does not end your US tax residency. Residency under the green card test continues until status is formally abandoned or revoked, so the date on which Form I-407 is processed, rather than your flight date, often drives the residency termination date. Until then, the US can tax your worldwide income, including your new London salary.

A further point should be flagged, though it deserves its own article. Individuals who have been lawful permanent residents in at least 8 of the last 15 tax years are long-term residents, and ending that status can bring the expatriation rules into play, including filing Form 8854. If that describes you, the timing of abandonment needs to be planned with that regime in view before the 1040-C appointment, not after it. For the purposes of this guide, the key compliance point is simply that the permit, the I-407 and the final dual-status return are three separate events.

Other Final-Year Compliance Items Not to Miss

Leaving the US does not close all of your US reporting in one go. Several items routinely fall through the gap between the permit and the annual return:

FBAR: if you were a US person during the year and your foreign accounts, including UK current accounts and ISAs, exceeded the aggregate threshold, the FBAR for the departure year is still due and is filed through FinCEN's BSA E-Filing System at https://bsaefiling.fincen.treas.gov
Form 8938 on the resident-period statement, where the specified foreign financial asset thresholds are met
State returns: New York, California and most other states require a part-year resident return, and some states apply their own sourcing rules to deferred compensation
Closing US brokerage and bank accounts cleanly, and updating W-8BEN forms once you are no longer a US resident so that withholding is applied correctly
Keeping a US mailing route or an authorised representative so that IRS correspondence about the dual-status return actually reaches you in the UK

What Happens If You Leave Without a Sailing Permit?

The IRS pages we reviewed describe the permit as something that must be obtained before you leave, but they do not set out a specific penalty for departing without one, and we do not state one here. What we can say from the returns we prepare is that leaving without clearance does not remove any liability. The annual return is still due, tax is still owed, and the absence of a permit can make later interactions, such as a return visit to the US or a future immigration application that asks about tax compliance, more complicated. If you have already left, the practical route is to make sure the final-year return is filed correctly and on time, with the residency termination statement attached, and to deal with any balance promptly.

How We Approach US UK Tax Returns Preparation for Departing Clients

Our process for a UK national leaving the US follows the three filings in order. About six weeks before departure we build the compensation schedule, confirm which residency test applies and draft the Form 1040-C. In the 30-day window we book and attend the IRS appointment with a complete document pack. After year end we prepare the dual-status US return, part-year state return, FBAR and any Form 8938, and then the first UK Self Assessment with SA109, using one set of dates and one day-count apportionment across all of them. For clients with trailing RSUs or deferred bonuses, we diarise each vest and prepare the associated nonresident US return and UK return entries as they arise.

The sailing permit is a short form with a long tail. Treated as the start of a coordinated sequence, it closes the US chapter cleanly. Treated as the whole job, it is the reason we see UK returnees receiving IRS notices two years after they have settled back into London.