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More UK investments and banking advice

More UK investments and banking advice

Old Apr 25th 2019, 9:35 pm
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Default More UK investments and banking advice

Hi all,

My E2 visa is progressing along now so I’m turning my attention back to my UK situation.

Currently I have, and contribute into a small size Stocks and Shares ISA pot along with a Stocks and Shares ISA.

What do people typically do with these investments whilst in the US for a couple of years?

Any savings in current accounts I am intending on using this to help me get started in the US with a bank account.

I also own a property in the UK which eventually will be let out so for now I need to keep a regular flow of money into my UK current account, is this a case of exchanging my US income into my sterling bank account?

Any advice would be great, thanks.

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Old Apr 25th 2019, 10:08 pm
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Default Re: More UK investments and banking advice

Originally Posted by Els87 View Post
..... Currently I have, and contribute into a small size Stocks and Shares ISA pot along with a Stocks and Shares ISA.

What do people typically do with these investments whilst in the US for a couple of years?

Sell them, they create a tax minefield and a mountain of paperwork.

That said, I suspect that some people who know that their time in the US will be both temporary and relatively short, just ignore the issue and "forget" to tell Uncle Sam about them.
…. I also own a property in the UK which eventually will be let out so for now I need to keep a regular flow of money into my UK current account, is this a case of exchanging my US income into my sterling bank account? ….
Well if your US income is your only source of regular income, isn't sending some of it back to the UK your only option?

Why are you not renting your home out ASAP, rather than "eventually"?

Using the info you have supplied I would liquidate my stocks and shares ISA and use the proceeds to pay my mortgage, assuming that there is a good reason not to rent my home out ASAP.
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Old Apr 25th 2019, 10:48 pm
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Default Re: More UK investments and banking advice

Originally Posted by Pulaski View Post
Sell them, they create a tax minefield and a mountain of paperwork.

That said, I suspect that some people who know that their time in the US will be both temporary and relatively short, just ignore the issue and "forget" to tell Uncle Sam about them.

Well if your US income is your only source of regular income, isn't sending some of it back to the UK your only option?

Why are you not renting your home out ASAP, rather than "eventually"?

Using the info you have supplied I would liquidate my stocks and shares ISA and use the proceeds to pay my mortgage, assuming that there is a good reason not to rent my home out ASAP.
Hi Pulaski, as you'll see from my posts on other finance-related threads I am completely ignorant to all US financial issues right now, and have had far too much going on here to think about them, but as my husband moves on 4 May (I'll be a while after) perhaps it's time to put that right.

Please can you explain (or point me to information on) why you would advise paying off a mortgage? We have recently liquidated all shares, and my husband got a decent redundancy payout, so we have a reasonably healthy bank balance but were thinking to leave the money accessible in case of emergency (e.g., coming back from the US with our tails between our legs) rather than paying the mortgage off straight away. As it's an offset account, we're not currently paying mortgage interest.

We are also leaving our apartment empty for a while - say, six months. We'll only be on an E3 work visa so hedging our bets!

I guess I need to understand the implications of different types of assets - cash v property.

Thanks for any advice.
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Old Apr 25th 2019, 11:00 pm
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Default Re: More UK investments and banking advice

Originally Posted by Els87 View Post
Currently I have, and contribute into a small size Stocks and Shares ISA pot along with a Stocks and Shares ISA.

I'm not sure what this means, is it a typo?

So, what you should do with a stocks and shares ISA depends on what's in it. The easiest answer is to sell it all and keep it as cash or as a cash ISA. Pay off the mortgage if you think that's a worthwhile use of the money. However, the actual problem is holding non-US mutual funds, ETFs or similar, since these are classed as PFICs by the US, which have both onerous reporting rules and taxation. Shares in individual companies are not subject to these rules, so if you want to, you can convert to use them only, or continue to hold them. Bear in mind that ISAs are not free of US tax, so a cash ISA is taxed like a bank account, for example.
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Old Apr 25th 2019, 11:12 pm
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Default Re: More UK investments and banking advice

Originally Posted by Kooky. View Post
…. Please can you explain (or point me to information on) why you would advise paying off a mortgage? We have recently liquidated all shares, and my husband got a decent redundancy payout, so we have a reasonably healthy bank balance but were thinking to leave the money accessible in case of emergency (e.g., coming back from the US with our tails between our legs) rather than paying the mortgage off straight away. As it's an offset account, we're not currently paying mortgage interest. ....
I actually said "paying" not "paying off", so meant use the proceeds of your ISA to make the monthly payments until you start receiving rental income, whenever that is.

I think you are correct to keep a substantial cash reserve as there are always lots of unexpected expenses for which cash savings can help smooth over, especially before you have built up your credit history.
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Old Apr 25th 2019, 11:22 pm
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Default Re: More UK investments and banking advice

Ah, thank you.

(I'm also a bit wary of "losing" an Au mortgage facility and possibly having to start again in a few years' time, though hopefully any move we make in Oz would be to somewhere less expensive than inner city Sydney!)
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Old Apr 26th 2019, 6:36 am
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Default Re: More UK investments and banking advice

I need to do a few bits to my house in the UK prior to renting, but I will then be receiving income from that property, paid into a UK bank account. Unfortunately it won't cover all the running costs so I need to still transfer some money into a UK account.

Now I could release the money from the ISA, we are talking a few grand so nothing major, and have that sit in a UK bank account, the interest would be very low.

Do you need to declare all UK income and capital?

Edit - From what I can see HERE I could still be considered as a UK resident, how would that affect things?

Last edited by Els87; Apr 26th 2019 at 7:00 am.
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Old May 10th 2019, 7:45 am
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Default Re: More UK investments and banking advice

So the general consensus is to liquidate any UK ISA funds and leave a little ticking over in a UK bank account, the rest brought over to the USA to help get started?
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Old May 11th 2019, 7:42 pm
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Default Re: More UK investments and banking advice

Originally Posted by Els87 View Post
So the general consensus is to liquidate any UK ISA funds and leave a little ticking over in a UK bank account, the rest brought over to the USA to help get started?
That's going to depend on your individual circumstances.

The specific advice I received was that the IRS does not recognize the tax-shielded nature of an ISA, therefore there was no sense in keeping it since any "tax free" gains in the UK would ultimately be taxable in the US. On that basis, I sold mine and used the funds to help me get started in the US.

Pensions are the big one that seems to cause the most confusion, since there is no way to really transfer private pension funds in the UK over to the US without incurring a tax liability. The good news is that you don't need to pay tax on any investment gains in your UK pension pot so you can keep it exactly where it is, however you will almost certainly need to declare the funds annually on an FBAR so if you have multiple pension pots, now might be a good time to think about consolidating them and reducing the paperwork here.
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Old May 11th 2019, 10:51 pm
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Default Re: More UK investments and banking advice

Originally Posted by TexanScot View Post
That's going to depend on your individual circumstances.

The specific advice I received was that the IRS does not recognize the tax-shielded nature of an ISA, therefore there was no sense in keeping it since any "tax free" gains in the UK would ultimately be taxable in the US. On that basis, I sold mine and used the funds to help me get started in the US.

Pensions are the big one that seems to cause the most confusion, ....
No, I think the "big one" is stocks and shares ISAs, because they have bigger issues than cash ISAs. Stocks and shares ISAs don't only need to be included on your FBAR, but there are additional disclosures because an ISA is a "foreign trust".
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Old May 11th 2019, 10:53 pm
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Default Re: More UK investments and banking advice

Originally Posted by Pulaski View Post
No, I think the "big one" is stocks and shares ISAs, because they have bigger issues that cash ISAs. Stocks and shares ISAs don't only need to be included on your FBAR, but there are additional disclosurea because an ISA is a "foreign trust".
Happy to defer to your superior knowledge on that one since like I said, I got rid of my ISAs prior to the move
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