As a USA tax resident am I legally allowed to transfer this money into a broker account and invest in the UK markets?

14 April 2021

Question by Adam

Hi, I am a British Citizen living in the USA with a USA residency/green card. I currently have over £25k sitting in my UK savings account earning a pitiful 0.1% APR interest rate. As a USA tax resident, I am researching and trying to find out if I am legally allowed to transfer this money into a broker account and invest in the UK markets (most probably a portfolio of UK index funds and ETFs). This would be a 10+ year investment strategy. I am currently not a UK taxpayer however I plan to return to the UK (very distant future) hence why I am exploring this option rather than transferring the money to the USA. Any advice (legal / tax) will be greatly appreciated. Thanks

Answered by Rachel Efetha

Hi Adam, that’s a tough question to answer! The US has far reaching tax implications for anyone classed as a US connected individual and you have to ensure that any investments within the UK comply with the Foreign Account Tax Compliance Act (FACTA) or there could be very heavy penalties. A great deal of UK brokers won’t take you on as a client due to the complex nature of the US tax system. I would look for an international bank or a specialist financial adviser who has expertise in this area, but make sure that you are investing in something that is regulated by the Financial Conduct Authority (FCA) for your own protection.

Answered by

Rachel Efetha

Chartered Financial Designer

Rachel has nearly 30 years’ experience in Financial Services, with the last 21 years advising clients. She advises on a holistic basis but particularly enjoys Cashflow Planning to see when her clients can afford to retire, and has reduced grown men to tears twice by telling them they could afford to resign right now. As a divorcee herself, Rachel loves coaching women going through divorce to take financial control, and has successfully argued with solicitors to gain her clients a much bigger slice of the pension pie.