Looking for financial advisor
 

I will be returning to the UK after 30 years in US. My financial advisor in the US isn’t familiar with UK tax rules and my previous advisor in the UK isn’t familiar with the US investments I now have. I’m looking for recommendations for a financial advisor based in UK with experience of dealing with/advice selling US investments (mutual fund and annuities). I don’t think I can sell US investments before returning as I’m also going through divorce proceedings, though the terms of my divorce should allow me to keep these investments. Spouse is US citizen remaining in US. I’m hoping we’ll have a court date with a judge in the next few weeks. I have read that selling prior to moving and then reinvesting is beneficial to avoid CG tax, but I don’t think I’ll be able to do this. There will be a penalty if I sell two investments before a 7 year commitment I made last year! I have set up a Wise account to receive my minuscule teacher retirement income. Ahh! Multiple life changes is stressful….. My new location will be in Lincolnshire. Any recommendations gratefully received.

Re: Looking for financial advisor
 

Sorry to hear that you are going through a divorce and moving back at the same time.

It is not necessary to sell your investments before moving back, so don’t stress too much much about it. Capital gains taxes here are manageable and free of tax or quite low depending on the size of the the actual gains. we’ve sold shares from our US investments each year we have been back since 2016. I don’t have a UK financial advisor I can recommend unfortunately.

https://www.gov.uk/capital-gains-tax

Re: Looking for financial advisor
 

Thanks, this is a relief to know. I figured I would just have to sell over time if nothing else transpired. I will research financial advisors with more determination when I get back. Weird buying a one-way ticket this time. Landing on dec 19th :)

Re: Looking for financial advisor
 

Good timing. You've picked a date when neither the border force or the trains are on strike. Keep an eye on the weather forecast, if there's a snowflake within 10 miles of the airport or a train track, they could yet grind to a halt.

Re: Looking for financial advisor
 

The UK Capital Gains tax tax-free limits will be reducing from April 2023 from £12,300 pa to £6,000 pa and then further to £3,000.pa in 2024-2025.
The current CGT tax rates are 10% and 20% depending on your income tax rate. (property is different).
You can protect future investments in the UK within an ISA wrapper - these future gains will be income tax and CGT free.
The maximum annual contribution is £20,000.

Re: Looking for financial advisor
 

One option is to sell £20k of investments each (tax) year and move it into an ISA.

Re: Looking for financial advisor
 

Good info, thanks for that.

Good idea, but before doing so be sure that you are no longer a "US Person" to avoid punitive taxes on stocks and shares ISAs as they will be considered PFICs by the IRS. Maybe wait a full year and also be sure to have met the conditions listed below.https://www.irs.gov/individuals/inte...sidency-status
https://www.irs.gov/individuals/inte...-presence-test

Re: Looking for financial advisor
 

Sorry for my ignorance, but are 401k distributions classified as stocks and shares and liable for UK capital gains taxes? I was asssuming they would be classified as income and be taxed at the applicable rate. Is CG tax above and beyond your normal income tax liability ?

Re: Looking for financial advisor
 

With careful planning on dates you might not miss out on the ISA allowance, as the US tax year is 1 January - 31 December and the UK is 6 April - 5 April.

Once you are no longer under US taxes for a calendar year, you can get a £20k ISA allowance for one UK tax year by investing in the period 1 January - 5 April, and another £20k ISA allowance for the next UK tax year by investing from 6 April.

Others are more knowledgeable then me on US taxes, and can confirm.

Re: Looking for financial advisor
 

Distributions from a 401k, IRA or other such retirement account are considered to be regular income by HMRC. No complications there.

CG taxes are above your normal tax liability. e.g. for 2022 if you have £20k regular income you will be taxed at 20% on £7,430 which is after the personal allowance of £12,570 has been deducted. Any Capital gains this year will then have the first £12,300 at 0% then taxed at 10%.As noted above, from tax year 2023-24 onwards those allowances are dropping a lot.

That sounds about right to me.

Re: Looking for financial advisor
 

To be clear, the same $ won't be taxed twice. It will be income or capital gains, not taxed as both.

Re: Looking for financial advisor
 

If you're landing at Heathrow, be aware that the baggage handlers are on strike on 19 Dec., so it might be worth considering travelling light and sending your baggage separately.

Re: Looking for financial advisor
 

[QUOTE=durham_lad;13159934]Distributions from a 401k, IRA or other such retirement account are considered to be regular income by HMRC. No complications there.

If an IRA distribution is made in the US before moving to the UK, and before the April 2023 tax year begins, I know I will taxed by the by US? Can the UK also tax this income? I will be moving myself and funds to the UK after the UK tax year has started.

Re: Looking for financial advisor
 

It won’t be taxed. HMRC taxes will start once you arrive and become tax resident. Income prior to arrival is not taxable.

Re: Looking for financial advisor
 

Thank you.