ISA Advice for U.S. citizen paying U.K. taxes

[siobski]

Hi, looking for some advice for my US partner. She has a job in the U.K. so pays U.K. taxes. She did some contract work this year with a U.S. company so is also filing some taxes in America. I wanted to know if she could put the money she earns from her U.K. job into an ISA. I know a lot of ISAs don’t allow US nationals but we found a few that do. Additionally, if you don’t think opening an ISA is a good idea - does anyone recommend the best way to put some of her savings into an ETF such as a Roth IRA or something think that?

 

[bigrijoe]

@siobski Might be best to post on r/AmericanExpatsUK

Just make sure you set a flair before you post

 

[siobski]

@bigrijoe Thank you! Will try

 

[liveandlearn]

@siobski The ISA will protect her from UK taxes but not from US. And most collective investments available in the UK do not work well for US taxes. Therefore a normal ETF in an ISA will create complications for US taxes that are best avoided. There are some US ETFs from Vanguard that have UK reporting status (ie are eligible for CGT treatment in the UK but I doubt they will be available in a UK ISA). You avoid the reporting complications if you invest in individual companies (not investment trusts) but those would still be taxable in the US. A SIPP is recognised tax free by the US but not an ISA.

 

[tejasomina]

@siobski The IRS will be taking a slice of that if they can lol.