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Topic: Buying US ETFs in UK  (Read 429 times)

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Buying US ETFs in UK
« on: January 20, 2022, 11:03:33 AM »
As a USC resident in the UK my investing options are very limited.  While trying to find an investment that is not an IRS PFIC but is an HMRC reporting fund I thought I would invest in US ETFs such as VOO via my Schwab account. However EU PRIIPS regulations block the sale of such ETFs to customers in Europe.

How do others get around this? I saw a thread on this forum but it's from 2015 which is pre-PRIIPS


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Re: Buying US ETFs in UK
« Reply #1 on: January 20, 2022, 04:32:43 PM »
As a USC resident in the UK my investing options are very limited.  While trying to find an investment that is not an IRS PFIC but is an HMRC reporting fund I thought I would invest in US ETFs such as VOO via my Schwab account. However EU PRIIPS regulations block the sale of such ETFs to customers in Europe.

How do others get around this? I saw a thread on this forum but it's from 2015 which is pre-PRIIPS

I have not had that problem.  I am a USC living in the UK this past 5 years and continue to buy and sell HMRC Reporting ETFs through my US Vanguard account.   Is your problem the initial opening of an account to buy such funds.  When we moved to the UK Vanguard told me we could continue to buy and trade within our existing accounts but couldn't open any new accounts.
Dual USC/UKC living in the UK since May 2016


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Re: Buying US ETFs in UK
« Reply #2 on: January 20, 2022, 05:17:07 PM »
That's right,  I need to open the account.

I had a tip today on tastyworks.com who said yes we could open the account and trade US ETFs but when I went to sign they refused me as they are not opening accounts for UKC resident outside US.

I used to have an account with Raymond James but after 25 years with them they suddenly kicked out all non-US residents with 60 days notice and threatened to liquidate all my assets (which would have been a CGT nightmare).

Seems like everywhere you turn is a dead end sometimes


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Re: Buying US ETFs in UK
« Reply #3 on: January 20, 2022, 06:52:24 PM »
That's right,  I need to open the account.

I had a tip today on tastyworks.com who said yes we could open the account and trade US ETFs but when I went to sign they refused me as they are not opening accounts for UKC resident outside US.

I used to have an account with Raymond James but after 25 years with them they suddenly kicked out all non-US residents with 60 days notice and threatened to liquidate all my assets (which would have been a CGT nightmare).

Seems like everywhere you turn is a dead end sometimes

Sorry to hear that, I don’t have any suggestions I’m afraid.
Dual USC/UKC living in the UK since May 2016


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Re: Buying US ETFs in UK
« Reply #4 on: January 20, 2022, 07:34:38 PM »
A few options I know of:

1. Use a US address to open a US brokerage (family, trusted friends, etc.) - reports vary of if this ever really matters, probably depends on the brokerage

2. Buy EU UCITS ETFs inside a Roth IRA - outside an IRA, they're PFICs and pretty toxic. Inside an IRA, doesn't matter, there's no tax or reporting. Interactive Brokers definitely allows this, I did it a couple weeks ago.

3. Buy options on US ETFs and then exercise them to get the underlying. Silly workaround to PRIPS, but I've heard it work from multiple people. You do have to buy in big chunks (100 shares at a time), and its a faff.

4. If you aren't already using your UK pension/SIPP, you won't be able to buy US ETFs but hopefully have some decent fund options there, and it's well protected by the tax treaty, no worries about PFICs.

5. Individual stocks - much more of a hassle, much harder to be diversified, but avoids both PFIC and PRIPS issues. Can be done inside an ISA (probably at Hargreaves Lansdown or Interactive Brokers, not many brokers will take a US citizen), or a taxable account (US or UK based, won't change the tax).

6. Become an accredited investor, with €500k+, history of active trading, and/or employment in finance (need 2 of the 3). Interactive Brokers again supports this, if you qualify. The PRIPS/KID rules only apply to retail investors, not accredited investors.

None of the options are ideal, but those are all the ones I'm aware of. I personally use a combination of my UK workplace pension, Roth IRA, and individual stocks in my ISA.


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Re: Buying US ETFs in UK
« Reply #5 on: January 21, 2022, 02:04:57 PM »
This is fabulously helpful. Thank you.


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Re: Buying US ETFs in UK
« Reply #6 on: January 28, 2022, 01:31:07 PM »
I hold a number of ETF's in my IWeb SIPP - although  these are all UK ETF's.

Further details on IWeb selections are here:

https://www.markets.iweb-sharedealing.co.uk/etf-centre/

Definitely not as extensive as you'll find in a US brokerage, but I'm hoping these are the next best alternative.

VUAG (https://www.markets.iweb-sharedealing.co.uk/etf-centre/details/IE00BFMXXD54/QCJH) seems to equate to VOO - or am I missing something?

Hopefully I'm not falling foul of any tax traps here, but I can't fault the returns I've received to date (except for the market turmoil of the last month or so  >:( )


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Re: Buying US ETFs in UK
« Reply #7 on: January 28, 2022, 02:51:54 PM »
If you are a US person then the UK versions of these ETFs are definitely not advised. They would be considered as PFICs and are subject to an onerous US tax reporting burden and punitive taxation rates.



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Re: Buying US ETFs in UK
« Reply #8 on: January 28, 2022, 03:40:08 PM »
Even when wrapped in a Pension and taking a Treaty Based position under Form 8833? - which I have been doing for years now.

Reading other threads on the Forum it seems like the Jury is still very much out on that one. Treaty vs IRS Tax code.

With thanks to @Art I feel his final comments on this thread are perhaps the most relevant:

https://talk.uk-yankee.com/index.php?topic=95426.0

The way I see it, I don't see investing in UK ETF's for my retirement as part of my tax efficient wrapper (SIPP) (HMRC approved)  I'm not putting together some elaborate tax evasion scheme
« Last Edit: January 28, 2022, 05:09:15 PM by Smitch »


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Re: Buying US ETFs in UK
« Reply #9 on: February 08, 2022, 05:07:59 PM »
SUCCESS UPDATE: 

Just in case anyone views this thread at a later date, I was successful finally in opening an account with tasyworks.com as a UK resident. They are the only broker I found who will allow purchase of US ETFs in a trading account (no SIPP wrappers etc.)

Thanks to those who responded!


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Re: Buying US ETFs in UK
« Reply #10 on: February 08, 2022, 06:19:06 PM »
Well done, thanks for the update.
Dual USC/UKC living in the UK since May 2016


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