PetrifiedExPat

Got it. My perspective was from a point of view of making the backdoor contribution, assuming OP will earn way over the income limits.

durham_lad

Yeah, our income was almost always above the deductible limit so I made non-deductible IRA contributions for years. It was nice when the Roth came along and I could convert that non-deductible IRA to a Roth. Between the 2 of us we now have over $1m in Roths, totally tax free in both US and UK.

Sq25394

On the subject of ISAs, once paying US taxes I was highly advised by both US and UK tax accountants to exit them. They’re not viewed favorably and for some reason tracker funds too.

durham_lad

Cash ISAs are okay, just treated as bank accounts and the interest taxed as such.

Stocks and Shares ISAs are taxed extremely heavily by the IRS plus complicated paperwork.

Glasgow Girl

It is not just tracker funds. All foreign pooled investments which includes but is not limited to tracker funds, ETFs, Unit Trusts, OEICs and Investment Trusts are taxed at draconian rates in the US. In addition, the IRS does not recognize ISAs, they are fully taxable. If you are moving over here sell these investments before you arrive. The-problem arises as soon as you become subject to US taxation, which is the day you set foot in the US, not when you start paying the taxes. It is very expensive and complicated to rectify the problem as a resident. Selling such investments prior to arrival is the only way to avoid the complex, time consuming paperwork and very high taxes. Google FBAR (which is just a minor inconvenience) and PFIC (which is the major problem) formore information if you have such investments.