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Topic: UK Stock Shares ISA - Tax Implications  (Read 2664 times)

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UK Stock Shares ISA - Tax Implications
« on: March 19, 2013, 03:06:11 PM »
Hi All,
I am moving to the UK for work on a Tier 2 General Visa and have read a lot of advice here on the forum about the do's and don'ts of opening up a stock & shares ISA.  I have a few questions for the forum that I am not 100% clear on:

1) If I invest in individual stocks within a stock/shares ISA will that remove the dreaded PFIC classification and filing requirements?
2) I assume the IRS would still see the ISA as a Foreign Grantor Trust, does that mean I will get taxed differently (i.e. if I sell shares would it be an ordinary income tax rate or capital gains treatment), trying to figure out if it is just an IRS classification or do FGT's get treated differently.

Ultimately, I am looking to be in the UK for a long-term (I will be a resident) and want to invest cash that is already in taxable US accounts (and would be viewed by the UK as taxable anyway I imagine). Since I will be taxed at a higher rate in the UK anyway, trying to figure out if putting that cash in a stock/shares ISA will avoid UK taxes and then my overall tax payments to the HRMC would offset any income I might have on the same portfolio if kept invested in the U.S.

Thanks to all

Thanks all


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Re: UK Stock Shares ISA - Tax Implications
« Reply #1 on: March 20, 2013, 10:25:40 AM »
(IMHO) In most instances, a stocks and shares ISA will cause complications on a US return (pooled foreign funds). If it's individual stocks or shares you purchase, it may ease the US burden, but have you found any such products (truly purchased and owned by the individual) within a certified ISA wrapper? As you are aware, any ISAs (of whatever variety) are deemed taxable in the US. Only a suggestion, but if you desire stocks and shares, it may be easier to forget about the ISA wrapper altogether and investigate ramifications for both the US and UK taxation of self purchased individual stocks and shares, and which ones may have an advantage.  
« Last Edit: March 20, 2013, 10:27:33 AM by theOAP »


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