Keeping Your UK Limited Company When You Move to the USA

Yes. There is no UK rule preventing a company having a US-resident sole director and shareholder, and Companies House and HMRC deal with overseas directors as a matter of routine. The company keeps trading, keeps filing, and keeps paying UK corporation tax. Nothing about the move itself breaks the company.

What changes is that a second tax system arrives, and the American one is unusually demanding of foreign companies owned by its residents. The question is therefore not whether you may keep the company but whether keeping it is worth the two-system cost, and that depends on how much the business earns, whether it will keep trading, how much cash sits in it, and how long you expect to stay in the US.

The one thing that is almost always true: the answer is cheaper to implement before you become a US tax resident under the green card or substantial presence tests described in our moving to the US guide. Several of the best options are only fully available while you are still UK resident.

A company incorporated in the UK is automatically UK tax resident under the incorporation rule, now in section 14 of the Corporation Tax Act 2009, so your Ltd stays within UK corporation tax at 19% on profits up to £50,000 and 25% above £250,000, with marginal relief between (GOV.UK). Accounts, the Company Tax Return, VAT and any PAYE scheme all carry on as before, and if you perform director duties in the UK on visits, PAYE can still touch that slice of your pay (see non-resident director tax).

For most destinations, the big risk of moving abroad is that the new country claims the company too, because the central management and control test (HMRC manual INTM120060) or a local equivalent follows the director. The USA is the odd one out: US federal law fixes corporate residence by place of incorporation alone, so running the board from Texas does not make the company US resident for federal purposes. In the rare case where dual residence does arise, Article 4(5) of the UK-US treaty sends the question to the two competent authorities, and until they agree the company is denied most treaty benefits, which is an outcome worth avoiding rather than testing.

The realistic US-side exposures for the company itself are different: a US trade or business or permanent establishment, for example where you habitually conclude the company's contracts from an American desk, can give the US the right to tax the profits attributable to that presence, and the state you live in can impose its own registration and franchise or income tax obligations under its doing-business rules. Where control actually sits, and where contracts are really concluded, should be documented from day one, exactly as for any director running a UK company from abroad.

The UK does not impose withholding tax on dividends, and the special rules for non-residents generally mean no further UK income tax is collected on dividends paid to a shareholder who has become non-UK resident. So the UK side of a dividend is usually quiet: the company has paid corporation tax on its profits, and the payment leaves the UK without a UK charge on you.

The US side is where the tax lands. As a US resident you are taxable on worldwide income, so the dividend goes on your US return. Dividends from a UK company can often benefit from the lower US qualified-dividend rates because the UK has a comprehensive tax treaty with the US, subject to the usual holding-period and classification conditions your US preparer will confirm. The treaty's Article 10 caps any source-state tax at 15% for portfolio holdings and 5% where a corporate shareholder holds at least 10% of the voting power, but since the UK levies nothing at source on dividends those caps are largely academic in this direction.

The planning point is timing. A dividend or capital distribution taken before US residency starts normally stays out of the US return altogether (certain first-year elections to be treated as a full-year US resident can change this), while the same payment taken a few months later goes straight onto it. Model the combined position with our UK-US take-home tool before you fix a moving date.

A controlled foreign corporation is a foreign company where US shareholders, each owning at least 10%, together own more than 50% of the vote or value (IRS, Form 5471). If you are the sole shareholder, your UK Ltd becomes a CFC on the day you become a US tax resident, with no election, no threshold to grow into and no grace period.

Three consequences follow. First, Form 5471 is an annual information return for US persons who are officers, directors or shareholders of certain foreign corporations, with schedules covering the company's profits, distributions and transactions with you; it is detailed, and penalties for missing it are significant. Second, the GILTI regime under section 951A (renamed net CFC tested income for US tax years beginning in 2026, though still widely called GILTI) can pull a large slice of the company's profits into your US return each year even if nothing is paid out, computed on Form 8992; because UK corporation tax runs at 19% to 25%, foreign tax credits and the high-tax rules often reduce the extra US cash cost substantially, but the computation and the forms are still required. Third, your state of residence may tax the income on its own rules, without the federal reliefs.

There is also a classification lever. Under the entity classification (check-the-box) rules, an eligible entity can elect on Form 8832 to be treated for US purposes as a corporation, a partnership or an entity disregarded from its owner, and a UK private limited company is generally eligible to elect (a UK plc is not). Electing transparency removes the CFC and GILTI machinery but makes you personally taxable in the US on the company's profits as they arise, and it creates its own UK-US mismatch questions, similar in kind to the ones we describe for US LLCs owned by UK residents. Whether and when to elect is a genuinely two-sided decision, and the timing relative to your arrival date matters. We explain these rules so you can see the shape of the decision; the US analysis and any filings sit with our US partners.

Four routes cover almost every case. The right one turns on whether the business continues, the size of the reserves, and how long you will be in America.

Note that dormancy is the option people most often overrate: it switches off UK corporation tax but not Companies House obligations, and it does not switch off CFC status, so the US reporting burden can continue for a shell that earns nothing. Closing properly, or keeping the company genuinely trading, are usually the two honest choices; our guide to closing a UK company when leaving the UK works through the strike-off and MVL mechanics in detail.

Every attractive feature of the closure route depends on sequencing. Capital treatment with Business Asset Disposal Relief at 18% works cleanly while you are still UK resident; a close-company distribution taken while temporarily non-resident can be taxed when you return to the UK within five years, and for returns to the UK from 6 April 2026 that charge applies whether the profits arose before or after you left. The two-year TAAR can re-tax a capital distribution as income if you start a similar business, in Britain or America, within two years of the winding up. None of this can be repaired retrospectively from a desk in New York.

The US clock is just as unforgiving in the other direction. Once the green card test or the substantial presence test is met, CFC status and the GILTI computation apply for that year, and a distribution or restructuring you meant to do beforehand is now inside the US net. Pre-arrival years are also when classification elections and balance-sheet clean-ups are simplest, because there is no US return for them to disturb. In practice the window for good decisions is the tax year before you fly, not the weeks after you land.

Our fixed-fee cross-border work is built around exactly this sequencing: we map your statutory residence test exit and split-year date against your US residency start date, model keep versus close on your actual numbers, and coordinate the American side so both returns tell the same story. Start with our relocation planner, and if the company is staying, put the board-minute discipline in place before the move rather than after.