scrubbedexpat099

I have been contacted about an old ISA and have been given 3 options, cash it is, move it to another one of their schemes, move it to somebody else.

Moving it to another one of their schemes is not an option as I am US resident however.

I am pretty sure there is nowhere else to go and I will need to take the cash but just thought I would ask.

Owen778

Stocks and shares or cash ISA?

Personally, I'd want to cash out an ISA of any sort as soon as I could, if I'd immigrated to the US.

scrubbedexpat099

I forgot about it.

Shares plus cash dividend.

nun

Do you own collective investment funds or individual shares? Have you been including this on you 1040? and filing FBAR etc if above the thresholds?

scrubbedexpat099

I had forgotten all about it, not a lot.

They are individual shares, the Company I worked for had a Share saving plan, when it matured the money saved bought the shares which went into an ISA. This was from before I immigrated.

nun

OK that makes things a bit easier. Did you ever have more than $10k in foreign accounts including your ISA while liable to US tax.

Hanco

What is the impact of having over $10k in a UK account wile liable for US tax? That's my situation (has been for 1 month and likely to be that until I go home for a visit later this year)

durham_lad

If you are filing US tax returns then I guess that you are a US resident or a US citizen.You have to file a Foreign Bank Account Report (FBAR) with the Treasury if at any time the total of your foreign bank accounts exceeds $10k.There is no tax due, it's just a report but the penalties for not reporting can be high.
You do this online here. BSA E-Filing System - Welcome to the BSA E-Filing System
More info on FBAR here.https://www.irs.gov/Businesses/Small...-Accounts-FBAR

Hanco

Thank you so much for that. Yeah, for tax purposes, I am resident in the US. FBAR will be filed. The fact there are penalties that can be high is not a surprise to me... The Inland Revenue in the UK is pretty soft on penalties compared to here isn't it!

Thanks again

nun

You must include any dividends or capital gains on your 1040 and pay US tax on them. Also file an FBAR if you have more than $10k in foreign accounts.

Hanco

1040?

(Can you tell, I need to schedule my tax advisor appointment!)

Until 4 weeks ago I was still earning £GBP

nun

You should do some basic Googling and talk to the HR department where you work. The "1040" is the IRS tax form that most US citizens and residents must submit by April 15th of every year to declare their worldwide income.

Steve_

We've had lots of ISA threads, doesn't make sense to hold onto it if you emigrate from the UK.

An ISA is not a bank account, it is specifically exempt from FATCA in the FATCA agreement with the UK. The IRS treats an ISA as a foreign trust and it is thus subject to 3520-A and 3520 reporting requirements. Completing 3520-A is basically impossible for the ISA holder unless it is a cash ISA, so long story short - if you move to the US, close all your ISAs. As the US taxes foreign trusts there is literally no point at all in holding onto it unless you're in the US for less than a year.

Moreover, an ISA is a benefit for someone resident in the UK for tax purposes - you're not, so it can create problems with HMRC as well.

Steve_

Read IRS publication 519, specifically the bit about dual-status returns and how tax residency is determined. https://www.irs.gov/pub/irs-pdf/p519.pdf

Also IRS publication 17 which is the basic "how to" for filling in a US tax return.

For foreign bank accounts, have a read of IRS form 8938 and the FinCEN FBAR website, different forms that you also have to fill in.

scrubbedexpat099

In case anybody is wondering and as my initial question was ignored I cashde it out.