US Citizens investing in the UK?

I just had a good conversation with Guya about US citizens invetsing in UK based mutual funds
or unit trusts. I seems to be almost impossible to do this basically because the UK investment firms
won't deal with you due to SEC rules and their own policies, and even if you can get an account
the taxation rules are byzantine, and potentially punative.

So, all you US citizens living in the UK, how do you invest your money?

You seem to be making an assumption that any of us HAVE money! 

You seem to be making an assumption that any of us HAVE money! 

Yes that was an assumption, but if you do have some cash what do you do, put it
under the mattress?

Yes that was an assumption, but if you do have some cash what do you do, put it
under the mattress?

Nope, it usually winds up on my daughter's back, or on her feet, or in the council's coffers, or in my landlord's pocket or summat like that.

blah I'll be lucky if theres £100 to spend after bills,rent,grocerys and baby things.
However,if I did have a lot of savings,I would invest it in an account that can grow intrest & have it so I can't take any money out until a certain amount of years, they call it CDs in the states..not sure what they call it here.

It seems to be almost impossible to do this basically because the UK investment firms
won't deal with you due to SEC rules and their own policies, and even if you can get an account
the taxation rules are byzantine, and potentially punative.

This really irritates me....in my opinion the US gov should not have their nose in what we do over here. For GS most of us are just trying to get by and live as comfortable as we can. 

Its already ridiculous that I have to fill out several forms a year on my UK income alone.

Yes that was an assumption, but if you do have some cash what do you do, put it
under the mattress?

I confess... I have £8.60 in a cash mini ISA. 
Sorry if i led anyone to believe i dont have any savings! 

(hey... I've got to laugh.  if I didnt laugh about it, I'd cry!)

I confess... I have £8.60 in a cash mini ISA. 
Sorry if i led anyone to believe i dont have any savings! 

(hey... I've got to laugh.  if I didnt laugh about it, I'd cry!)

That's £8.60 more than I've got in savings.

So, all you US citizens living in the UK, how do you invest your money?

good question. in the next few months after my student loan is paid off, I intend to do something with my money. I have a good job, no kids and I am realist, I need to save for my future because no one else is going to do it for me!

Let me know what you find out. I will probably just invest in the states since I am likely to end up there eventually.

The majority of US citizens who are resident in the UK are not domiciled within the UK.  Consequently they can invest outside of the UK and pay no UK tax on interest, dividends, capital gains etc providing that the investment income is not brought to the UK. 

This is a standard tax planning technique, which I frequently advise on in my day to day existence.

For longer-term savings there are several classes of assets available, including stocks, bonds, commodoties, real estate, precious metals, cash, insurance policies and other collective investments.

Depending on family size, nationalities, personal expectations etc the correct investment will differ in each case.  Investment advice in the UK can only be given by an Independent Financial Adviser (IFA) authorised by the Financial Services Authority (FSA).  An FSA registered adviser will him/herself want to protect his/her liability by ensuring that advice given will not cause any adverse tax effects.  The first place to start seeking investment advice has, therefore, got to be an IFA.

Several UK investments are not available to US citizens or residents because of SEC regulation.  Others would be foolish to choose because of the tax consequences (either UK or US). 

I note that nun already has appointed a personal tax adviser so will be able to get full tax advice from that person since s/he will have full knowledge of nun's circumstances.  If any further explanation would assist others, please shout!  No question is stupid! 

thanks guya!

[iThe majority of US citizens who are resident in the UK are not domiciled within the UK.  Consequently they can invest outside of the UK and pay no UK tax on interest, dividends, capital gains etc providing that the investment income is not brought to the UK. 

Depending on family size, nationalities, personal expectations etc the correct investment will differ in each case.  Investment advice in the UK can only be given by an Independent Financial Adviser (IFA) authorised by the Financial Services Authority (FSA).  An FSA registered adviser will him/herself want to protect his/her liability by ensuring that advice given will not cause any adverse tax effects.  The first place to start seeking investment advice has, therefore, got to be an IFA.

But some of us are "domiciled in the UK".   We live here permanently and pay UK taxes. How do we find a competent Independent Financial Adviser (IFA) authorized by the Financial Services Authority (FSA) that we know will give the right advice?

What my husband and I have are kept in separate names in our respective countries because we don't know the ramifications of what the almighty Uncle Sam may want/expect from a far (from my pocket or his). I have to say, I don't like not having my name on things over here.... but if that is what I have to do (have faith in my husband/marriage), I will do that. The paperwork is unreal (ex - the useless exercise I have to go through every year on my UK income to satisfy the states), I can't imagine anymore. 

Thanks for all of your advise on the tax thread...it is appreciated!!

But some of us are "domiciled in the UK".   We live here permanently and pay UK taxes. How do we find a competent Independent Financial Adviser (IFA) authorized by the Financial Services Authority (FSA) that we know will give the right advice?

Good luck finding an IFA who understands your particular situation.

If you're a US citizen domiciled in the UK it amazes me the issues with investing. As a
UK citizen domiciled in the US there are no problems at all as long as you don't own any foreign funds.
This all stems from the US being the only country to tax on citizenship and not residency. I'm in
a great Catch 22 situation being both a UK and US citizen and planning on being domiciled in
the UK. It looks like my US citizenship makes investing in UK based funds difficult and my domicile
in the UK will mean that I'll have to pay UK tax on investments in the US (I expect there to be offsets
for US tax paid though). As I don't think its actually illegal for a US citizen to buy UK funds, I'll
probably open an account in the UK under my UK citizenship if the tax situation isn't too
bad. There is some nasty reporting to do, but I have a tax advisor and now they can earn their money.

Just an observation, I'm amazed by the answers I got to my question. I had expected to get a
few from people who were buying funds in either the UK or US, but apparantly nobody is investing any
money........

Nun - I am going to be investing in the UK when I move, and am looking into the details now.  We are not a wealthy couple, but we are good savers and we sure do want to retire at some point in our lives!    

How hard was it to find an IFA who knew about US/UK taxes?  I'm going to be living near Cardiff and am worried that we won't be able to find anyone near us.  I'm also worried that most will have minimum portfolio values in order to work with you.  I have a good 401(k)/IRA for a 26 year old, but it's not big enough to meet the minimums of most advisors in my area in the US.  And it is going to be staying in the US.

I'm happy investing in index or lifecycle funds at this point in my life, so I don't really want investment advice.  I want tax advice and someone to walk me through the investment vehicles I'll have access to. 

Nun - I am going to be investing in the UK when I move, and am looking into the details now.  We are not a wealthy couple, but we are good savers and we sure do want to retire at some point in our lives!    

How hard was it to find an IFA who knew about US/UK taxes?  I'm going to be living near Cardiff and am worried that we won't be able to find anyone near us.  I'm also worried that most will have minimum portfolio values in order to work with you.  I have a good 401(k)/IRA for a 26 year old, but it's not big enough to meet the minimums of most advisors in my area in the US.  And it is going to be staying in the US.

I'm happy investing in index or lifecycle funds at this point in my life, so I don't really want investment advice.  I want tax advice and someone to walk me through the investment vehicles I'll have access to. 

Carrie, you sound similar to me, a saver. I too have 401ks that I'll leave in the US until I'm 59 1/2, but I also have some savings and I'll be working in the UK so I'll have some money to invest. I like simple investing so I to go with index funds or lifecycle funds and I wanted to do the same in the UK. In the UK the index funds are often called "tracker funds" and you can get them from the big banks, Fidelity UK etc. However, the US taxs foreign mutual funds owned by US citizens in a really nasty way and it might be difficult to get an invetsment account in the UK as you are a UK citizen. I'd check with the big banks HSBC, Barclays.

Work out what your residency status will be in the UK. I assume you are a US citizen. Secondly an IFA is going to be able to tell you about invetsments not taxes. I'd recommend you look at a few of the taxation adviors' sites here

http://www.expats.org.uk/finance/tax-advisors.html

Its good that you are thinking ahead. But it may be best for you to simply keep investing in the US as Guya says

The majority of US citizens who are resident in the UK are not domiciled within the UK.  Consequently they can invest outside of the UK and pay no UK tax on interest, dividends, capital gains etc providing that the investment income is not brought to the UK.

In any event some money spent now in planning may save you a big tax bill and will certainly buy you peace of mind. As Guya knows I thought that I could navigate this tax stuff, but it got very complicated as my situation is a bit strange being a UK/US dual citizen planning on being domiciled in the UK