Non-US Investing • US Green Card Holder Relocating Back to the UK

Hi Everyone,

I'll be relocating with my partner around the end of August back to the UK from Colorado, after 7 years in the US, under our own steam. I've dug into the resources on this site and the tax treaty (thank you all for the great content - @TedSwippet it appears your own experience has been invaluable) and am considering the following approach. Would love any feedback / sense checking and will be look to get in touch for an expert on relocation taxation as well.

• We will surrender our Green Cards as we leave the US / just after arriving in the UK.

• We will both keep at least a checking and high interest savings account each and will get a low cost US Sim before we leave for 2FA reasons etc.

• I will setup a Wise or equivalent account where I can transfer money between the US and UK as needed. I assume this will be competitive for large amounts but will dig in further as closer to the time.

• We would aim to open investment, high yield savings and ISAs on our return to the UK. Could this be challenging, even if we've surrendered our Green Cards? Do we need to 'qualify'? Sorry - a while away from the UK!

• I am planning to consolidate mine and my partner's investment accounts to Fidelity, as my 401k is already with them. Noted on spotty accounts of whether they'll support us when in the UK but would like to simplify and make the inquiry. Currently have long-term investments and Roths with Betterment, who are clear on not supporting in the UK.

• For my long-term investment account it appears that it will be problematic for Fidelity to transfer my account to a UK equivalent so the best approach maybe to liquidate and reinvest in the UK. If I sell whilst in the US, I assume I would owe the taxes via my US Tax return? If I didn't liquidate until a later date once in the UK, perhaps if it takes a while to be eligible to open UK equivalent accounts, would I be right in thinking I'd be paying my tax burden through UK Capital Gains? Is it worth doing sums to see what would be more favorable?

• We will, for the meantime, leave my 401k and our Roth IRAs as they are as they will be protected from taxation under the treaty. Should I be looking to liquidate / move long-term? Does anyone have experience here? I read some concerns on long-term trans-Atlantic policy but nothing concrete.

• My HSA seems more complex. At the moment I was considering claiming any reimbursements for any medical expenses we have accumulated and then taking the penalty for early withdrawal after. Any other strategies?

• For the split year, I believe we will need to submit tax returns in both the UK and US. Paying taxes on the US tax return for anything earned up to the period I left and then in the UK for any worldwide income after I arrived? Or do I need to submit for the full year on the US return and claim relief?

Is there any sense to trying to 'time' large transfers to the UK? Prior to the General Election? Aware that the idea of timing most with investments is generally problematic.

The move is to be closer to family during important years, so we are unlikely to seek a return to the US despite some fantastic years. We are not close to retirement age but won't be seeking employment for a little while and will possibly be self employed long-term. If we move countries again, it would likely be towards Europe, as my partner is working toward their passport via family relatives (we're both British).

Thanks in advance for any advice!

Just on Exchange Rates, you cannot really time it.

But big uncertainties can cause big moves if there is a surprise. So that would be the Brexit vote as the classic example.

In the case of a General Election, the opposition party is so far ahead that I doubt the market will move much-- it's taken a read on the most likely next PM and Chancellor, and it's not overly worried. And there's limited possibility of a PM like the previous to this one, who caused a mini-crisis in less than her 49 days in office. BUT if they somehow fell back to a minority rather than majority government - that's not in the price of sterling right now, I don't think. Markets like certainty not uncertainty and a minority government, and the complexities of coalition politics, is uncertainty.

So it's a judgement call. You could split it half before and half after.

On your US retirement accounts. Tax treaties, once made, seem to take decades to unpick. I imagine (not sure) that you want to make sure you hold HMRC reporting funds?

On capital gains. If you liquidate holdings whilst in USA you pay US capital gains. If you liquidate holdings in UK when you become resident, you pay UK tax. That's my understanding of it. Beware any non-reporting funds in that latter case - the tax is painful. I would probably liquidate whilst in USA and pay tax there, free and clear (but in some states like California that can be quite painful?).

ISAs and that you usually just need to sign a form (W8N?) that says you are not a US taxpayer. If you have a UK residential address, they may not even ask. The hard part is you need an address in the UK plus ID for money laundering checks (passport usually).

Statistics: Posted by Valuethinker — Thu Apr 25, 2024 3:47 am — Replies 1 — Views 251

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