BigLaw International Secondment: Tax & Financial Planning Guide (2026)

What is a BigLaw secondment?

A secondment is a temporary assignment — typically 6 months to 2 years — where a US-based attorney works at the firm's foreign office, most commonly London, Singapore, or Hong Kong. Unlike a permanent relocation, secondments maintain the attorney's employment relationship with the US partnership or corporation while the attorney performs work in the foreign jurisdiction.

For associates, secondments are increasingly common as a career development opportunity. For partners, foreign office rotations are driven by client relationships or cross-border transaction needs. The financial implications differ from both a permanent overseas move and a short business trip.

US tax obligations while abroad

The US taxes citizens and resident aliens on worldwide income regardless of where they live or work. Being physically in London does not exempt your UK earnings from US taxation. You file Form 1040 as normal, reporting your full income, and then claim relief for the double-taxation problem via either the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit (FTC).

Qualifying for relief: bona fide residence and physical presence tests

To claim either the FEIE or the foreign housing exclusion, you must meet one of two tests:

• Bona fide residence test — you were a bona fide resident of a foreign country for an uninterrupted period that includes a full tax year. Attorneys on typical 12–24 month secondments usually qualify, though the test has a facts-and-circumstances component.
• Physical presence test — you were present in foreign countries for at least 330 full days during any 12-consecutive-month period. This is the more mechanical test and the one most secondees rely on.

Short secondments of 3–6 months typically don't qualify under either test — so brief assignments are taxed by both countries, with double-taxation relief available only via the FTC (no physical presence test met, no FEIE available).

FEIE vs. foreign tax credit: the choice for BigLaw secondees

Once you qualify for the FEIE, you choose between two double-taxation relief mechanisms. In most cases, BigLaw attorneys on secondment fare better under the FTC — but the choice depends on your income level and the assignment country's tax rate.

Foreign Earned Income Exclusion (FEIE) — IRC §911

The FEIE lets you exclude up to $132,900 of foreign earned income from US taxable income for 2026.¹ A supplemental foreign housing exclusion covers qualifying housing costs above a base amount, up to an additional $39,870 in 2026.¹ Combined, you can potentially exclude roughly $150,000–$172,000 before US taxes apply.

The critical limitation: income above the exclusion cap is taxed at a higher marginal rate due to the "stacking" rule. The IRS places your excluded income in the bottom brackets first, so remaining taxable income is pushed into higher brackets. An attorney earning $400,000 who excludes $132,900 sees the $267,100 remainder taxed at whatever rate applies above $132,900 — effectively 35–37% on most of it.

Foreign Tax Credit (FTC) — IRC §901

The FTC lets you credit taxes paid to a foreign government against your US tax liability, dollar-for-dollar (subject to the limitation that the credit can't exceed the US tax otherwise due on foreign-source income). There's no cap on income eligible for relief. Excess credits carry forward for up to 10 years.

Why FTC usually wins at BigLaw income levels

The FEIE can outperform FTC in two scenarios: (1) the assignment country has very low or zero income tax — so foreign taxes are minimal and the exclusion is "free" tax relief on up to $132,900; or (2) the attorney is an associate earning below $132,900 total, and the exclusion covers all income while in a low-tax jurisdiction. Most BigLaw London assignments don't meet either condition; Singapore and HK assignments are worth modeling explicitly because their lower rates change the calculus.

FEIE vs. FTC comparison calculator

Enter your estimated income and the effective foreign tax rate in your assignment country to see the expected US tax under each approach. Estimates only — actual returns require Form 1116 (FTC) or Form 2555 (FEIE), which are more complex.

Firm tax equalization programs

Most AmLaw 100 firms with substantial international practices operate a formal tax equalization program for officially-seconded attorneys. Understanding it changes how you interact with the firm's global mobility team — and clarifies which personal financial decisions remain entirely your own.

What equalization does NOT cover:

• Personal income unrelated to the assignment (investment income, rental income, freelance work, a spouse's earnings)
• Additional taxes triggered by personal financial decisions you make while abroad — Roth conversions, capital gain realizations, large IRA contributions
• State income taxes if your home state taxes domiciliaries regardless of physical presence (New York and California do — see below)
• UK National Insurance employer contributions (a firm cost) and the implications for any UK state pension entitlement

Even with equalization in place, you benefit from understanding the mechanics: some firms have gaps or errors in their hypo tax calculations; the firm's global mobility advisor optimizes for the firm's aggregate cost, which may not align with your personal situation; and equalization typically ends when the secondment does, leaving you to unwind complex filing positions for the transition year.

London (UK): income tax and National Insurance

For the UK tax year running April 6, 2025 to April 5, 2026, income tax on earnings applies at three rates above a personal allowance of £12,570.²

The personal allowance phases out for earnings above £100,000 (losing £1 of allowance per £2 of excess income) and is fully withdrawn at £125,140. A BigLaw partner earning £300K effectively has no personal allowance and an average income tax rate above 40%.

National Insurance (Class 1 employee, 2025-26)

Class 1 employee NI contributions run at 8% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270.³ For an attorney earning £200,000, this adds roughly £4,200 in NI on top of income tax. The employer separately pays 13.8% employer NI above the secondary threshold (£5,000 from April 2025), but that's a firm cost, not yours.

US-UK income tax treaty

The US and UK have a comprehensive bilateral income tax treaty. For employment income, primary taxing rights generally go to the country where the work is performed (the UK, for a London secondee). The US retains taxation rights as the country of citizenship, but the FTC eliminates most or all remaining US liability after UK taxes are credited. The treaty also includes tie-breaker rules for dual-residence situations and specific provisions relevant to partners of US partnerships performing services through a UK affiliate.

Singapore: lower rates change the FEIE vs. FTC calculus

Singapore income tax for YA2026 (income earned in calendar year 2025) is progressive from 0% to 24% for tax residents.⁴ Non-residents on short assignments (under 183 days in Singapore) pay 15% on employment income or the resident rate, whichever is higher. A US attorney earning the equivalent of $300,000 in Singapore faces an effective rate of roughly 20–22% — meaningfully below the 37% US federal rate at that income level.

Because Singapore taxes are lower than US rates, the FTC doesn't fully offset US tax: you get credit for what you paid Singapore, but the remaining US tax is real. Singapore assignments require more careful modeling — the FEIE may be competitive (especially for associates earning near or below the $132,900 cap), or a hybrid approach using both the FEIE and FTC on different income segments may be optimal. Use the calculator above with a 20–22% effective rate for Singapore.

CPF (Central Provident Fund) — Singapore's mandatory savings scheme applies only to Singapore citizens and permanent residents. Most US attorneys on secondment are neither and are exempt. Your Singapore employer (the firm's Singapore entity) may make employer CPF contributions for Singapore-citizen employees on the team, but not for you.

Singapore has no capital gains tax and no estate or inheritance tax, which simplifies personal investing during the assignment. The US-Singapore income tax treaty does exist and covers certain investment income and pension distributions.

Hong Kong: low tax rate, no treaty

Hong Kong salaries tax for 2025-26 applies at progressive rates from 2% to 17% on net chargeable income (after allowances), or at a two-tiered standard rate — 15% on the first HK$5 million of net income and 16% above — whichever results in lower tax for the individual.⁵ Most BigLaw partners assigned to the HK office pay at or near the 15% cap.

The 15% HK rate is well below the 37% US top federal rate. Consequently:

• Under FTC, a meaningful US top-up tax remains after applying the HK credit — the rate differential triggers real incremental US tax.
• FEIE may outperform FTC for HK assignments, particularly for income near the $132,900 cap.
• For higher income levels, a hybrid approach (FEIE on the first $132,900 + FTC on the remainder) is often the best available position, though this requires careful Form 2555 and Form 1116 coordination.

No US-HK income tax treaty. Hong Kong is a Special Administrative Region of China and is not party to the US-China income tax treaty. The FTC (or FEIE) is the only available double-taxation relief mechanism. There's no treaty-override path to reduce withholding on investment income or add treaty-based protections available in the US-UK or US-Singapore frameworks.

Retirement accounts during secondment

401(k) contributions

If your firm's 401(k) plan defines "compensation" to include foreign earned income (most large firm plans do), your $24,500 annual deferral limit (2026) is unaffected while you remain an active participant.⁶ Confirm with HR: some firms move seconded attorneys to the foreign office payroll, which can interrupt 401(k) plan participation if the plan excludes foreign-paid compensation.

IRA contributions: the FEIE trap

This is one of the most commonly overlooked planning issues for seconded attorneys. Under IRC §219(f)(1), IRA "compensation" is reduced by amounts excluded under §911 (the FEIE). If your FEIE exclusion equals all your earned income for the year, your IRA contribution base drops to zero — you cannot contribute to a traditional IRA, Roth IRA, or use the backdoor Roth strategy.

At Big Law income levels, direct Roth IRA contributions are already phased out ($168,000 single / $252,000 MFJ in 2026), so the backdoor Roth is the strategy. But even the backdoor Roth requires compensation. Choosing FTC instead of FEIE preserves your IRA contribution eligibility. For an associate earning near the FEIE cap who plans to continue backdoor Roth contributions, this is a decisive argument for the FTC.

Student loans during secondment

IBR/SAVE payments while abroad: Income-Driven Repayment plans calculate payments based on AGI. If you're using the FEIE to reduce AGI, your IDR payment may drop — which sounds beneficial, but note that Big Law firms are not qualifying employers for PSLF regardless of where you're posted. Payments made while employed by a Big Law firm in London count no more toward PSLF's 120-payment threshold than payments made in New York. The PSLF clock doesn't run during Big Law employment, domestic or international.

Annual recertification: IDR plans require annual income recertification. If you're abroad when your recertification date arrives, submit using your most recent Form 1040. Ensure your servicer has a current contact address and is not sending required notices to a US address you're no longer monitoring. See our student loan strategy guide for the full IBR vs. refinancing vs. PSLF framework.

NQDC §409A during secondment

A secondment is not a "separation from service" under §409A — you remain employed by the same partnership or corporation, just working at a different location. Your existing NQDC elections remain in force. You continue accruing deferred compensation on the same schedule, and no §409A distribution is triggered by the secondment itself.

Caution: if the firm's legal structure for the secondment involves transferring you to a UK or Singapore affiliate and terminating your US employment relationship, that transfer may constitute a separation from service, triggering §409A distributions on any existing balance. Clarify the employment structure with HR and general counsel before agreeing to secondment terms. See our deferred compensation guide for §409A mechanics.

NQDC income sourcing: Deferred compensation accrued during a foreign assignment may have complex US-foreign income sourcing implications when distributions occur in future years. Large NQDC balances accrued partly abroad require sourcing analysis that affects FTC calculations in the distribution years — another reason to keep a cross-border CPA involved beyond the secondment itself.

Housing allowances and cost-of-living adjustments

Most AmLaw 100 firms provide London and Singapore secondees with housing allowances, cost-of-living differentials, school-fee reimbursements, and annual home-leave travel. US tax treatment:

• Cash housing allowances paid in addition to salary: Generally taxable US income, though the §911 foreign housing exclusion (up to $39,870 for 2026) can shelter a portion for qualifying secondees.
• Home-leave airfare and school fees paid as cash allowances: Generally taxable. May be excludable if paid directly to the service provider under a qualified employer reimbursement arrangement under IRC §132.
• Firm-provided housing (apartment in London, Singapore, etc.): The fair market rental value is generally taxable income. The "employer's convenience" exclusion under §119 is narrow and unlikely to apply to a London flat.

Tax equalization programs typically gross up these allowances so you don't pay additional hypo tax on them — confirm this with your firm's global mobility team before assuming it applies.

State tax: the domicile trap

New York and California tax individuals based on domicile, not physical presence. If you were domiciled in New York before the secondment, you remain a New York domiciliary while in London and owe New York state and city income tax on worldwide income — unless you changed your domicile to a different state before departing.

Changing domicile from New York is not simply a matter of establishing a London residence. The New York Department of Taxation and Finance aggressively audits domicile changes by high-income individuals, looking at primary home, business location, items of sentimental value, and social ties. Simply not having a New York apartment during the secondment is not sufficient if all other domicile markers remain in New York.

California applies similar (though somewhat different) statutory rules. Tax equalization programs generally do not cover state taxes — this gap is yours to bear.

Get matched with a Big Law specialist

International assignments layer a foreign tax system, a bilateral treaty framework, Form 1116 or Form 2555 complexity, IRA eligibility risk, and state domicile exposure on top of an already-complex Big Law financial picture. A fee-only advisor who works with Big Law attorneys — alongside a qualified cross-border CPA — can audit the firm's equalization calculations, protect your retirement account contribution eligibility, plan the transition back to the US, and model the FEIE vs. FTC choice before the election deadline.

Fee-only · No commissions · Free match · No obligation