Tax Free Isa's?

Just seen an advert on TV for Tax Free ISA's, how do they work with US taxes?

Tax-free ISAs were mentioned in your other tax thread, as being an account that you do have to pay US taxes on (presumably because you are not paying any taxes on them in the UK, so you are subject to US tax instead). See this post here: http://talk.uk-yankee.com/index.php?topic=68202.msg953847#msg953847 (third paragraph).

Tax-free ISAs often have restrictions on how much money you can put into them each year - my ISA had a restriction that I could not pay in more than £3,000 in any tax year, although it may have been increased to about £5,000 now (tax year: April 6th to April 5th, I believe) and if I took any money out, then I could not pay it back in again if I had already reached my £3,000 limit for the year.

thanks for the info and sorry for the repost

Tax-free ISAs were mentioned in your other tax thread, as being an account that you do have to pay US taxes on (presumably because you are not paying any taxes on them in the UK, so you are subject to US tax instead).

This isn't the reason you pay US tax in ISAs. The reason is that the US just doesn't recognise the ISA's tax free status. To the IRS it's just another foreign account.

Be careful what sort of ISA you get as a "stocks and shares" ones will probably be in a foreign pooled investment and these are to be avoided by US citizens because of the onerous way they are taxed by the IRS. Reporting is a pain and taxes are high so I'd stick to a cash ISA.

This isn't the reason you pay US tax in ISAs. The reason is that the US just doesn't recognise the ISA's tax free status. To the IRS it's just another foreign account.

Ah, okay, thanks for clarifying - I wasn't really sure why, so it was mostly a guess  .