How should a US citizen invest while in the UK?

I'm going to be moving to the UK with my spouse in August, and the tax issues have left me dizzy! I'm a pretty active investor in the US (well, active as in I make regular contributions, I don't day-trade). How should i invest while in the UK to avoid tax exposure? I know ISAs are not tax-proof for Americans. Is there an equivalent of an individual account I should open?

I'm so confused. Any help would be great. Thanks!

I second that!!! Completely in need of some direction and resources here.

Hi,

There's no one set way on how a US citizen should invest in the UK, there's far too many variables and preferences, products and services available !

Do take a look at moneysavingexpert.com and thefool.co.uk and from there, you'll probably be linked into various other online resources which you find is favourable to you and what/how you wish to invest.

Everyone is different according to their own individual financial circumstances which will affect on how and where to invest and in what type of direction. I'd love to 'invest' in another property to rent out, but it's just far far too expensive around here and in most of the rest of the country, so I've taken a different route.

Do also look into any legal and tax issues that may arise from your individual circumstances and I'd say it's well worth speaking to a tax lawyer familiar with both countries in order to cover yourself correctly as to what you'll owe etc.

Cheers, DtM! West London & Slough UK!

The big problem for US citizens resident in the UK is the tax treatment of their investments. UK mutual funds are very US tax inefficient and US mutual funds will probably be UK tax inefficient if you are taxed on an arising basis.

So your options are to invest in individual US or UK stocks, things like CDs or high interest savings accounts - there is a good argument for constructing a UK saving account ladder for short to mid term funds - or invest in US funds that are HMRC distributing funds. Luckily US Vanguard ETFs are classed by HMRC as distributing so if you have a Vanguard account before you leave the US (you can't open one without a US address) you can invest in Vanguard EFTs and get all the advantages of low fees and get tax efficiency in the US and the UK.

 I just received a notice from the Mutual fund Company/Brokerage Firm that I have been with since 1987 that as an investor domiciled outside the US my investments have been frozen.  I have tried to find another broker but the one I chose said the same thing, that because I am living in the UK and have a foreign address they couldn't take me!  What do I do?

If you want to keep your investments and be able to still trade them - you need a US address.  Does anyone have any advice on this? 

I just received a notice from the Mutual fund Company/Brokerage Firm that I have been with since 1987 that as an investor domiciled outside the US my investments have been frozen.  I have tried to find another broker but the one I chose said the same thing, that because I am living in the UK and have a foreign address they couldn't take me!  What do I do?

If you want to keep your investments and be able to still trade them - you need a US address.  Does anyone have any advice on this? 

You could argue with them, but the easiest thing to do would be to get a US address and go over to email delivery of all your account correspondence. I doubt you will be able to open another US brokerage account with a foreign address, but FYI Vanguard are ok with foreign addresses as long as you opened the account while you lived in the US.

Also you could open a UK brokerage account with someone like Hargreaves and Lansdown and invest in indivudual stocks and shares or US domiciled ETFs like those offered by Vanguard, but make sure they are US domiciled as anything else will get you in PFIC problems.

If you want to keep your investments and be able to still trade them - you need a US address.  Does anyone have any advice on this? 

I've been living in Europe for years and continue to invest with my US brokerage account.  What I did before I left the US was to sign up with a mail forwarding service (there a lots of them, most in FL) which provides me with a valid US street address (not a PO Box) and then I got a FL phone number via Skype.  Both of these incur an annual fee of course, but it allows me to do whatever business I need to in the US with no questions.

So you could at this point set up something like that and should have no problems attaining a new brokerage account.   Hope that helps.