Expat-friendly ISA accounts
#1
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Hi all,
I'm currently living in the US but I plan to move back to the UK at some point. I have some money in a stock & shares ISA but realized recently that I have fallen into the PFIC trap. To make things worse, I asked my ISA provider if I could by american ETFs with my account and once they realized I was an US taxpayer, they notified that they have to close my account (*)
I've looked around and could not find a good answer but, is there a expat friendly ISA account? The requirements would be:
* Ok to take American taxpayers
* That allows purchasing of American ETFs with UK reporting status. Eg. Vanguard VTI.
* Low cost (optionally....)
(*) They have not said why yet but I assume it is because they don't want to deal with FATCA. Thanks a lot FATCA, this makes it really great for consumers :-( Even if ISAs are exempt from FATCA, some banks still don't want to even get close to it.
Thanks a lot!
I'm currently living in the US but I plan to move back to the UK at some point. I have some money in a stock & shares ISA but realized recently that I have fallen into the PFIC trap. To make things worse, I asked my ISA provider if I could by american ETFs with my account and once they realized I was an US taxpayer, they notified that they have to close my account (*)
I've looked around and could not find a good answer but, is there a expat friendly ISA account? The requirements would be:
* Ok to take American taxpayers
* That allows purchasing of American ETFs with UK reporting status. Eg. Vanguard VTI.
* Low cost (optionally....)
(*) They have not said why yet but I assume it is because they don't want to deal with FATCA. Thanks a lot FATCA, this makes it really great for consumers :-( Even if ISAs are exempt from FATCA, some banks still don't want to even get close to it.
Thanks a lot!
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#2
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Invesco UK will send out 1099s for US tax payers, but opening an ISA may not be possible. There is no tax advantage while you are a US tax payer. It may be easier to deal with Invesco US and just invest in European funds.
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#3
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There are no advantages today but they will be in the future if I stop being a US tax resident, right? Or am I missing something? (I'm not a US citizen)
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You cannot contribute to an existing ISA when non-resident in the UK, so I am sure you cannot open one.
https://www.gov.uk/individual-saving...-abroad-or-die
https://www.gov.uk/individual-saving...-abroad-or-die
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You cannot contribute to an existing ISA when non-resident in the UK, so I am sure you cannot open one.
https://www.gov.uk/individual-saving...-abroad-or-die
https://www.gov.uk/individual-saving...-abroad-or-die
First of all, you can be UK tax resident while being US tax resident. I never said I'm not UK tax resident...
Secondly, even if you cannot contribute to the ISA, you can still move your existing ISA contributions to another account. So yes, you should be able to open an account. It's just a matter of finding the good one :-)
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Also it's probably tidier to keep taxable and non taxable accounts separate. It saves any confusion when speaking to customer service etc.
Saying that, there may be situations , where not having to pay UK taxes and only US taxes would be beneficial.
Saying that, there may be situations , where not having to pay UK taxes and only US taxes would be beneficial.
Last edited by mrken30; Feb 21st 2017 at 8:29 am.
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The UK looks at tax residency in terms of number of days physically present in the UK, if I recall correctly.
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Ozzidoc is very much right unfortunately. It's very hard to be tax resident in zero countries but very easy to be tax resident in multiple ones. For a short period of time I was tax resident in the UK, US and Sweden at the same time
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It is possible to be tax resident in more than one country, but it's usually best avoided because of the complications of cross border tax. You should arrange your affaird to avoid dual tax residency where possible. If the OP is both US and UK tax resident is he claiming the remittance basis for his UK tax?
I would try Charles Schwab in the UK for ISAs......but I doubt you'll be able to open or transfer any accounts without a UK address and residency outside the UK will bar you from a new account.
I would try Charles Schwab in the UK for ISAs......but I doubt you'll be able to open or transfer any accounts without a UK address and residency outside the UK will bar you from a new account.
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If the OP is both US and UK tax resident is he claiming the remittance basis for his UK tax?
I would try Charles Schwab in the UK for ISAs......but I doubt you'll be able to open or transfer any accounts without a UK address and residency outside the UK will bar you from a new account.
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I actually find it hard to believe that you are a UK resident for tax purposes if you are living in the US.
Last edited by nun; Feb 24th 2017 at 1:27 am.
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ISAs are designed for UK tax residents, there's no point to it if you don't live in the UK, because you don't need a shelter from UK tax if you don't live there.
All it does is create an enormous paperwork headache with the IRS, so get rid of it.
The closest US equivalent is a Roth IRA. I think Roth IRAs are exempt under Article 18 of the tax treaty but even if they aren't, regular IRAs and 401(k)s definitely are, so put it in one of those.
All it does is create an enormous paperwork headache with the IRS, so get rid of it.
The closest US equivalent is a Roth IRA. I think Roth IRAs are exempt under Article 18 of the tax treaty but even if they aren't, regular IRAs and 401(k)s definitely are, so put it in one of those.
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