Welcome. I moved back from the US to the UK in 2008. Some notes below, then.
Firstly though, a crucial question. Have you taken out US citizenship during your stay? For the moment, I've sort-of assumed no. If yes, some of the answers below may change.
wilberforce wrote: ↑Tue Jan 12, 2021 1:06 pm
Retirement Assets
I believe we can transfer tax advantaged QROP funds (i.e. 401Ks and Roth) into SIPP or similar UK retirement funds without penalty. Any complications here?
Almost certainly not possible, I'm afraid. Traditionally, the US simply does not permit retirement accounts to move outside of its borders intact. Any company claiming that they can do it for you will very likely embroil you in a heap of tax costs and/or pension limitations that you would rather avoid.
That aside, the picture for UK residents holding US retirement accounts such as 401ks and IRAs is actually pretty good.
The US/UK tax treaty prevents the UK from taxing US pensions until withdrawals, so they retain their tax-deferred nature. On withdrawal, the standard treaty treatment is for this to be taxable as income to the UK only (although if you are a US citizen, the US bypasses this, making withdrawals taxable to both countries, with credits where necessary to avoid actual double-tax). The treaty also recognises Roth accounts, so that a Roth IRA or 401k retains its Roth-ness.
Also, the UK has a decent estate tax treaty with the US, so non-US citizens domiciled in the UK don't have significant worries about confiscatory US estate taxes. And a FATCA IGA, so there should be no nonsensical US FATCA withholding either.
All in all, this is about as good as things get in tax-treaty-land.
wilberforce wrote: ↑Tue Jan 12, 2021 1:06 pm
Other Assets
But what to do with our non-tax advantaged brokerage accounts? Should we
* Liquidate all non-retirement investments in one go prior to returning to the UK, pay US CGT, transfer the proceeds and re-invest in the UK?
You might. Or you might choose to wait until after leaving the US. If non-US citizens, once out of the US (and with any green cards safely surrendered, form I-407), you are then entirely free of US tax obligations. The UK has a sizeable capital gains tax allowance that the US does not have, and that can make it more tax efficient to realise gains as a UK resident rather than as a US 'taxable person'. It depends how much gain is involved though, and whether short-term or long-term (the UK does not differentiate on that, but the US does). Running the numbers both ways should help tell you the answer.
Pay close attention to any fund or ETF holdings that do not have HMRC 'reporting status'. A lot of Vanguard US domiciled ETFs have this, but their mutual funds do not. And while a few non-Vanguard US domiciled ETFs also have it, the list there seems rather short. If you sell a fund or ETF that lacks this, the UK taxes the capital gains at income tax rates. Depending on what you hold in these accounts, that could change the calculus.
wilberforce wrote: ↑Tue Jan 12, 2021 1:06 pm
* Liquidate investments in stages, paying US CGT etc., and periodically transfer the proceeds to the UK as cash? I believe we'll have to account for the UK CGT difference when doing this?
As already noted, once you leave the US, and provided you are not US citizens and do not retain green cards, you would be outside the US tax net. And in the UK, within the UK tax net. If you are US citizens or retain green cards, you will face tax from both countries, with credits to alleviate actual double-tax.
wilberforce wrote: ↑Tue Jan 12, 2021 1:06 pm
Offshore?
Also, wondering if its worth considering moving our assets to Isle of Man, Jersey, etc.?
Unlikely. Unless you can use the UK's 'non-dom' tax status (Google this -- it's not my area, but I have a recollection that UK citizens cannot use it), then this will over-complicate your future UK tax position, but likely without any compensatory benefit.
Finally, again assuming non-US citizenship, FIRPTA (Google this also) very much suggests that you should sell your US home before dropping your US 'taxable person' status. As for HSA, no idea; never had one. Worst case, the UK would probably view it as an unwrapped trading account. No idea how you would use it from the US perspective once in the UK, though. Knowing the US, unlikely to be anything close to straightforward.
Oh, and if total assets top $2mm and you have green cards, watch out for the US's spiteful and appalling Soviet-style 'expatriation tax'. If triggered, this nasty provision has the potential to entirely destroy your retirement prospects.