Remittance Newbie - Bank Interest / Investment Questions

Hi all.  I am new to the forum and will be moving to the UK in a month.  Really enjoy the varied and interesting threads! I have two questions for this very wise group.... Note I will be moving to the UK for about 2 years, so will be resident but not ordinary resident.

Interest: My tax adviser has advised me to set up my pre-assignment capital accounts (cash in a US savings account) to credit any interest paid directly to another offshore (US) account.  My bank (HSBC) is struggling with this.  Has anyone had any luck setting up this type of sweep arrangement?   As I understand it, this only matters if I want to ever bring that pre-assignment cash into the UK after I have become a RBNOR. 

Brokerage Accounts: I've read a few threads holding US mutual funds in non-retirement accounts.  As RBNOR, is there anything I need to worry about or are these concerns mainly for ordinary residents who have not elected the remittance basis (i.e., paid the 30k).

Thanks all in advance!!

The status of not ordinarily resident is not set in UK statute and the courts are increasingly saying that ordinary residence can only be established after a period of time has elapsed.  In other words one ignores intention and instead read the story of a man's life backwards once one can see what actually occured.

The UK has one of the most complex remittance regimes in the world; luckily most banks in Jersey, Guernsey and the Isle of Man can easily set up segregated income and capital accounts.

US mutual funds are - generally - not UK compliant.  You may have UK problems, but this naturally depends on how much you hold, how frequently you trade, the kind of income and future £/$ exchange rates.

On the question of mutual funds - I have mutuals, among other things, held in a 401k & 403b and traditional IRA (not Roth). When there's a distribution, am I right that that's just a straightforward 'pension' for purposes of UK taxation. Doesn't matter that it was (partially) from mutuals, or any other kind of instrument. (i'm ordinarily resident and don't claim non-dom status)

As far as I can tell, if you have a US retirement account (401k, IRA, whatever) then the UK does not tax your mutual fund income or gains in any way unless you are taking distributions.

As far as I can tell, if you have a US retirement account (401k, IRA, whatever) then the UK does not tax your mutual fund income or gains in any way unless you are taking distributions.

This is my understanding too (promise!) - but HMRC frequently reinterpret the rules so it might change.  This view is however subject to the annual filing of a UK return electing to use the tax treaty.

This view is however subject to the annual filing of a UK return electing to use the tax treaty.

@guya, how exactly does one file a UK tax return electing to use the treaty for one's retirement accounts? I've had a look through all the UK tax forms and could not find anything related.

thanks for your replies. It's the distribution that I'm interested in. Am I right that on the UK return the distribution is foreign pension income (filing UK annually and taking a treaty position on the US return).