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Opening new UK accounts when already an Expat

Opening new UK accounts when already an Expat

Old Oct 8th 2014, 3:30 am
  #1  
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Default Opening new UK accounts when already an Expat

I had some money that was locked into a Bond when I moved to the US, so was unable to liquidate; inertia caused me to re-enrol several times, but I'm finally trying to get the money into equities. (FBAR/FACTA/Tax-Credit Done).

Vanguarding away here, it's temping to do the same thing with the GBP back in the UK, via ETFs perhaps.

I've been searching this site, bogleheads and fool.co.uk, and seen plenty of possibilities, but never quite seen anyone be able to open a new account.

(e.g. selftrade, interactive-investor, lloyds international, TD Direct, Barclays Expat).

Clicking through on Hargreaves Lansdown, I saw this on their Online Fund & Share Account application page:
By proceeding you confirm that, for tax purposes, you are solely resident in the United Kingdom and that you are not a citizen of the USA. If you cannot agree to this declaration please apply using this application form.
Finally looks promising, and the account can be structured for quite a low overhead I believe for passive investing.

Anyone tried them recently from the USA?

- Or any better suggestions.
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Old Oct 8th 2014, 3:48 am
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Default Re: Opening new UK accounts when already an Expat

In general, it is unwise for a U.S. citizen/resident to invest in anything that might be considered a so-called "passive foreign investment company". Although there is no definitive list of what is and is not, it potentially covers most non-U.S. mutual funds and it would be unwise to invest in a product with such potentially adverse U.S. tax consequences.

If your future is in the United States, why not bring the funds to the U.S.?
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Old Oct 8th 2014, 4:12 am
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Default Re: Opening new UK accounts when already an Expat

I think there are some Vanguard US ETFs that can be held:

Bogleheads • View topic - US funds with HMRC reporting/distributing status

Bringing the funds to the US is a possibility, though I am not yet a US Citizen; which would likely cement that option.
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Old Oct 8th 2014, 5:24 am
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Default Re: Opening new UK accounts when already an Expat

Originally Posted by JAJ View Post
If your future is in the United States, why not bring the funds to the U.S.?
I'd be inclined to do this, because the tax/ reporting hassles are far too much bother the other way. Bring the money over, and then invest through Vanguard or similar broker in a FTSE tracker if you like - just because the money is held in the US, it doesn't have to be invested in something based on the US economy.

I take a birds-eye view of my portfolio, and consider that my UK pensions are my non-US allocation (especially since they're basically now just 401(k)s that I can access once I'm 55), and my money here is my US allocation (split across tax-deferred/ taxable accounts, and invested in US index-tracking mutual funds/ bonds in wrappers that make sense tax-wise.

We are actually currently quite non-US heavy, as hubby and I are in our mid-40s and have only been here a few years; this will even out over the next 5-10 years as we add to our US investments. Do you have any pension pots from your previous UK existence? If you throw everything into a spreadsheet and do a nice pie chart, you may decide that you're quite top-heavy in non-US investing anyway, and that the money would be better off here tracking something more US-mainstream.
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Old Oct 8th 2014, 11:14 am
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Default Re: Opening new UK accounts when already an Expat

Originally Posted by McBadger View Post
I think there are some Vanguard US ETFs that can be held:

Bogleheads • View topic - US funds with HMRC reporting/distributing status

Bringing the funds to the US is a possibility, though I am not yet a US Citizen; which would likely cement that option.
You are a bit confused here. The funds you mention are US based funds and they are on the reporting funds list of HMRC, so they tax efficient for UK and US tax payers. If you buy these funds from a UK based brokerage make sure they are actually the US based funds and not a foreign fund with a similar name.

However, why would you go to all the trouble of trying to open an account in the UK to buy US based funds, just move the money to the US and buy directly from US Vanguard. Then you don't have to bother with UK taxes and resourcing of dividends and gains at all.
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