After years in the UK spent seeking ways to minimise your tax liability throughout your working life, it may not have occurred to you that tax should be high on your list of considerations when you choose where to live in the US.

It has recently come to light in a Market Watch article in The Wall Street Journal that for retired people, taxes are the largest expense that people face. Therefore, when considering retiring to the States, it is vitally important to assess how you will be taxed on your property, your income and your consumption. Doing these sums will mean that you are fully informed on your overall tax burden and won’t receive any nasty surprises after the move.

Based on analysis by CCH, a Wolters Kulwer Business, and research conducted by the Tax Foundation it has been found that the most tax-friendly state for retirees in the US in Alaska. This may not have been your first choice due to its location and its cold weather but it may well be worth a second look. The northern state which borders Canada doesn’t take personal income – this includes pension income and social security benefits. There is also no state-imposed sales tax but there may be some local sales tax and property is taxed. Overall, tax burden in Alaska in 2009 was only 6.3 per cent compared with the national average of 9.8 per cent.

The next best US states for tax are South Dakota, Nevada, Wyoming and Texas, none of which place tax on personal or pension income. Texas is also one of just 13 states that don’t tax property at a state level but local government property taxes can be quite high.

The Sunshine State of Florida, a favourite retirement destination, does not tax pension income or social security benefits but unfortunately property and sales taxes can be higher than the average. This is something to bear in mind when browsing properties and it is advisable to chat to your realtor about how much you will realistically be taxed on your dream retirement home.

Pennsylvania and Mississippi are lovely places to live and are definitely worth mentioning as potential retirement havens due to the fact that neither state taxes pension income. Other forms of income will be taxed.

Before you make the move and retire to the USA, it is essential to consider all aspects of your income and lifestyle. Being completely informed on your overall tax burden means you know your budget and can plan your retirement accordingly.

For details of property for sale in America, visit the USA listings on Rightmove Overseas. One way to save money when buying in the USA is to use a currency specialist when transferring your pounds into dollars to complete the purchase of your property. For more information on this, contact Smart Currency Exchange.

To understand the full step-by-step process to buying a property in America, collect The Overseas Guides Company’s ‘USA Property Buying Guide’