The US-UK technology and venture capital corridor is one of the world’s most active cross-border investment routes. London and the broader UK tech ecosystem receive significant US venture capital, and UK-founded companies frequently list on US exchanges, acquire US entities, or establish US subsidiaries. US founders, investors, and employees navigating this landscape face highly complex tax obligations on both sides of the Atlantic.
Who We Serve
- US citizens and green card holders working in UK technology companies (including pre-IPO and scale-up businesses)
- UK entrepreneurs with US investors considering US market entry
- US venture capitalists investing in UK companies
- Tech employees with equity compensation (options, RSUs, carried interest) across both jurisdictions
- Angel investors and seed-stage founders with cross-border equity holdings
Equity Compensation: The Core Challenge
Equity compensation — stock options, restricted stock units, share incentive plans, carried interest — is taxed very differently in the US and UK. Mishandling equity events can result in double taxation, missed elections, or penalties:
UK EMI Options (Enterprise Management Incentives)
UK EMI options provide UK-favourable tax treatment (capital gains tax on gain, not income tax), but US holders of EMI options must analyse whether the options qualify as Incentive Stock Options (ISOs) under US law — they typically do not, meaning the US may tax EMI option gains as ordinary income. Careful planning at grant and exercise is essential.
RSUs and Restricted Stock
Restricted Stock Units (RSUs) vest and are taxed as employment income in both the US and UK at vesting. The key issue for mobile employees is apportionment — when an RSU was granted while working in one country and vests while working in another, both countries may claim taxing rights over different portions of the gain.
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Fund managers receiving carried interest face different US and UK treatment. The UK taxes carried interest at CGT rates (under the new carried interest rules from April 2025), while the US treats it as long-term capital gain under IRC Section 1061 (subject to the 3-year holding requirement). Cross-border fund managers require coordinated US-UK advice.
US Founders with UK Companies: CFC and GILTI
US citizen founders of UK tech companies face Controlled Foreign Corporation (CFC) rules and GILTI (Global Intangible Low-Taxed Income) provisions under the Tax Cuts and Jobs Act. GILTI requires annual inclusion of a share of a foreign corporation’s net tested income on the US shareholder’s return — even if no distributions are made. For early-stage companies this may create US tax liability before the business generates distributable cash. Proactive planning through elections and structuring is critical.
Seed EIS and EIS: US Investor Considerations
The UK’s Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) offer significant UK tax reliefs for investors in qualifying UK startups. US investors in SEIS/EIS companies must be aware that:
- The UK relief is not recognised for US tax purposes — gains on EIS shares are still taxable in the US
- EIS/SEIS shares held in qualifying structures are reportable on the FBAR
- If an EIS/SEIS company is a Passive Foreign Investment Company (PFIC), punitive US tax rules may apply to gains — regardless of the UK exemption
Related services: Business & Corporate Tax | Cross-Border Tax Planning | US-UK Business Expansion