Amid concerns about politics and thanks to the introduction of a new UK tax system for residents, applications for British citizenship from across the Pond have risen substantially, official figures show. The story somewhat contradicts fears of an outflow of affluent people from the UK.

The number of US citizens seeking UK citizenship rose to the highest on record in 2024, with US political controversies and UK tax changes fuelling a rise in applications, so it appears from various media reports. 

More than 6,100 US citizens applied last year, the most since records began two decades ago and 26 per cent more than in 2023. Overall applications for UK citizenships were up 6 per cent to 251,000, another record. Figures also showed that in the year ending March 2023, actual grants of British citizenship fell 7 per cent on the previous year to 181,480.

The data counters – to some extent – fears that the UK’s ending of the resident non-domicile system, and replacement with a residency scheme giving applicants a four-year tax-free window – would hit UK revenues. However, the data does not state what the wealth of the applicants is. Non-doms are overwhelmingly HNW and UHNW people, and their exodus to continental European countries such as Italy and Portugal, or the United Arab Emirates, for example, has caused fears that the UK will suffer a drop in overall tax revenue. (See a related article about how the changing rules affect American expats here.)

This news service has spoken to US-based advisors about the phenomenon of Americans looking at foreign options, touching on the challenges of escaping the clutches of the Internal Revenue Service. Exiting the US and renouncing US citizenship is not free. The State Department charges a flat fee for renunciation, set at $2,350. Depending on tax status, a person may also have to pay additional taxes to complete the process.

Advisors have told this news service that even before the November 2024 elections, citizens on both sides of the aisle were looking at foreign options. Some were alarmed at talk suggesting that had Kamala Harris won office with a Democrat majority in the House, she might push for wealth taxes and even the idea of a tax on unrealised capital gains. On the other hand, those who disliked the agenda of Donald Trump also investigated foreign options. 

In the past, the worldwide system of tax that the US adopts, contrasting with the territorial system used by most countries such as the UK, Germany and France, has deterred US citizens from working overseas, setting up firms there, or retiring, although a number of countries have treaties with the US to stop people being taxed twice. Even so, US expats are seen as a compliance headache by foreign financial institutions, which means that expats can struggle to open a bank account and run investments. 

In recent years, however, several specialist players, such as Schroders, Maseco, London & Capital and Royal Bank of Canada, have ramped up services to those with US connections. Vontobel and a clutch of Swiss external asset managers have developed US-focused offerings, obtaining SEC licences to do so. But still, the US expat financial experience remains difficult. The advocacy group, American Citizens Abroad, has campaigned for the US to adopt a territorial tax code, such as that used by most nations. 

Ironically, the data about UK citizenship applicants from the US came out shortly after President Trump unveiled his plan for a “golden card” system to encourage high net worth foreigners to come to the US. This idea is part of a global market for residency/citizenship-by-investment that is operated by several jurisdictions, such as Portugal and Malta. 

Home Office data shows that applications by US citizens surged in the last quarter of 2024, rising 40 per cent year-on-year to about 1,700. In total, there were 269,621 grants of British citizenship in 2024, 30 per cent more than 2023.

(Editor's note: The story also comes at a time when the UK, along with other developed countries, faces political controversy about net immigration from certain countries and regions, such as the Middle East and Africa. Immigration from people in places such as Hong Kong – a former British colony – has tended to be largely under the political and media radar, or stirred little concern, it seems.)