US Money market funds

UK Yankee-

Regarding my US brokerage account at Vanguard (VG): I am a USC residing in the UK for 20+ years and file both US and UK Income Tax forms.

VG(US) currently has my Settlement Account in their Federal Money Market Fund. In addition, I also have some funds in their Cash Reserves Federal Money Market and Treasury Money Market Investor.

Would these funds be considered unregistered mutual funds and not eligible to be held by me? If yes, what would be an appropriate alternative at VG?

Thank you.

-Taxi

I am in a very similar position and hold money market accounts at VG US. I will continue to declare the interest to both the IRS and HMRC and pay taxes until I’m told otherwise. The dividends I get from my Vanguard ETF is different in that I get the lower IRS and HMRC rates.

The Vanguard money market funds are not ETFs and do not appear on the HMRC reporting funds list. I think that strictly speaking they pay dividends rather than interest. But if you are declaring the "interest" every year and paying UK tax on it then that sounds like the right way to deal with a UK non-reporting fund anyway.

The Vanguard money market funds are not ETFs and do not appear on the HMRC reporting funds list. I think that strictly speaking they pay dividends rather than interest. But if you are declaring the "interest" every year and paying UK tax on it then that sounds like the right way to deal with a UK non-reporting fund anyway.

Looking at my last UK return they appear in schedule 3: Foreign Savings, and are listed as "Vanguard qualified dividends" (from my ETF equity fund) and "Vanguard unqualified dividends" from the Vanguard money market clearing account. The qualified dividends attract the lower tax rates and unqualified dividends get treated as interest.

Looking at my last UK return they appear in schedule 3: Foreign Savings, and are listed as "Vanguard qualified dividends" (from my ETF equity fund) and "Vanguard unqualified dividends" from the Vanguard money market clearing account. The qualified dividends attract the lower tax rates and unqualified dividends get treated as interest.

Funds that have capital gains and dividends are the ones that get hurt the most  by the “non reporting” tax regime  as each year you have to pay tax on the capital gains and dividends at income tax rates. If all you have is a non reporting money market fund and declare the “dividends” as interest each year, then I think you are following the rules for non reporting funds.