porkedpie

I’m moving to the US but possibly only for a few years. I have a good amount of investments in my ISA (several years full subscriptions) and I’d like to not surrender that tax benefit in case I move back to the UK long term.

i know I can’t use regular ETF/Funds as these will usually be EU/UK based on fall foul of PFIC tax while I’m in the US. I know I could put it in individual stocks, which I might do to pseudo-index.
But in theory there are a bunch of US based funds which are UK reporting which should be possible to buy but I can’t find a broker which does so.
Anyone been able to achieve something like this?

porkedpie

E.g. and ISA that allows me to buy

bogleheads .org/wiki/
Vanguard_US_domiciled_ETFs_that_are_UK_HMRC_report ing_funds

Aoi

UK reporting status may not be necessary if the ETF is in an ISA or SIPP tax wrapper. You can search for ETFs here:

https://www.justetf.com/uk/

Expanding ‘Fund Domicile’ reveals no US domiciled funds. An explanation is here:

https://www.justetf.com/en/news/etf/...iled-etfs.html

‘The culprit is PRIIPs – a set of EU investment regulations designed to protect consumers (PRIIPs stands for Packaged Retail Investment and Insurance Products).

PRIIPs require fund providers (including ETFs) to produce a Key Information Document (KID) that enables investors to compare the risks, rewards and costs of different investment products.’

Glasgow Girl

I looked for years to find some kind of UK approved investment fund that would avoid PFIC taxation rules and came up short. If you find anything, myself and a lot of other people, would appreciate you sharing the details. It sounds like you know that the IRS does not recognize ISAs as tax free and will tax all sales, dividends and interest. If you do end up keeping some form of mutual fund in your ISA you may want to sell and buy back before you move here, that way you would reset your cost basis and help mitigate the nasty PFIC taxes as best you can if you end up selling while subject to US taxes. Otherwise as you say individual shares or bonds are your best bet.

If you want to hedge your bets until you decide whether you are here long term or not and you want to retain mutual funds within your ISA then you should investigate the different ways PFICs can be taxed. The default excess distribution method that most expats default into is the most punitive but you can also elect the QEF or Mark to Market method, both have much better outcomes than the default excess distribution method but are still worse than standard capital gains. QEF is very limited to a handful of funds which may or may not be HRMC approved (unlikely) so the mark to market is likely your best option. In any case both methods require that you proactively elect these methods right away so something to investigate sooner than later if that is of interest to you.

Aoi

The HMRC list of reporting funds is here:

https://www.gov.uk/government/public...eporting-funds

To find out whether a platform supports a fund copy the ISIN into the platform’s search. As an example, IE00B3XXRP09 is VANGUARD FUNDS PLC S&P 500 UCITS ETF USD(GBP) (VUSA). ‘IE’ indicates that the fund is domiciled in Ireland which would be a PFIC for a US resident.

For US domiciled funds look for ISIN numbers that start with US. For example, typing US9229083632 into a UK platform’s search probably yields no results. Typing US9229083632 into google yields VOO S&P 500 ETF.

Perhaps you could try telephone dealing if you find a fund that you like.

porkedpie

OK thanks all. Sounds like it's not possible for now.
My best option is probably to just pull it all out of the ISA, and put it in a US [taxable] brokerage. Sure there's (hopefully) cap gains taxes in due course, but it's simple and the tax rates are not so high.
The other options are really just either leave it in cash in the ISA (maybe for people only in the US for a short time, with a lot built up in their ISA this would be a good option), or pseudo-index with individual stocks (which comes with higher risk and fees).