7

I am EU citizen and the resident in UK holding an investment ISA. I will be moving back to my home country this year and I was trying to find out whether I would still be able to trade in my ISA after the move. The Government website only says that adding new funds to the account is not be possible after moving abroad, but does not specify whether or not using the existing funds to make new investments is allowed (https://www.gov.uk/individual-savings-accounts/if-you-move-abroad-or-die). My current ISA provider told me they would let me keep my ISA with the funds and investments already made, but after I move abroad they would not let me buy new stocks, only sell what I have owned. I've asked several ISA providers and some even said that they would close my ISA after I become a non-resident, but a few of them assured that they would let me trade from abroad, so I am guessing it is up to financial institutions to make the rules for their clients. I am posting here to find out if someone has done such thing: lived in UK and held an investment ISA, then moved abroad and kept legally using it to trade stocks and funds.

  • Why do you want to keep the ISA? If you're not paying UK tax any more, the ISA wrapper gives you no advantages. – Mike Scott Mar 10 '17 at 12:41
  • Do you mean I will have to tax the profits made in my ISA after the move? And if so - pay the tax in UK or my home country? – mac13k Mar 10 '17 at 12:47
  • 1
    Yes, countries outside the UK won't respect the tax-free status of the ISA, and you'll have to pay tax on it in your new home, just like any other foreign investment income and capital gains. – Mike Scott Mar 10 '17 at 12:51
  • 1
    OK, I see your point. But what if I move abroad, keep investing in my ISA and make profits, then come back to UK and cash out? – mac13k Mar 10 '17 at 13:01
  • 1
    But investment income is generally taxable in the country where you live, not the country where it was generated. Or maybe both, but there are double-taxation treaties that will generally prevent that. – Mike Scott Mar 10 '17 at 13:19
5

After doing some more digging I figured there are two parts of this problem:

  1. Being able to use the UK investment ISA after moving abroad.
  2. Taxing the profits from investments.

Re. 1: It was very confusing to get the straight answers to this question, because I contacted several UK financial institutions who provide investment ISAs by phone and email. In most of the cases I got a negative answer when I called the helpline and a positive one via email. In other words I spoke to agents on the phone and they said that it is not possible to add funds to or buy new stocks in ISA after moving abroad, but when I got replies to the emails (after long 48 hours - because they 'aim to respond within 2 working days', so they can take their time to do so), they said that it is possible to buy and sell stocks in ISA after moving abroad. Each time I asked for the confirmation and I got one. Still there were some providers who said they would not allow new buy transactions or close the account altogether, so it is up to the providing institution whether to allow non-resident clients or not.

Re. 2: The tax-free status of the profits made in ISA is only guaranteed in UK, but the profits may be the subject to Capital Gains Tax in the new country of residence (as it was pointed out in the comments by @Mike Scott). I said 'may be', because there is a lot of factors to consider which depend on the tax laws and the particular situation of the individual. In my case it seems like I will not have to tax my ISA profits in the country I'm moving to in the current financial year if I spend most of the time abroad (that is more than 183 days of the financial year) which means that if I move in the second half of the financial year I should be able to make tax free investments in my UK ISA until the end of this financial year.

| improve this answer | |
  • Do you remember which providers indicated you could continue to trade existing funds in your stocks and shares ISA after you became a non-resident? – Andrew Jan 20 at 22:22
  • Barclays, Lloyds, HL, IG. – mac13k Jan 21 at 10:51
0

Halifax have blocked my stocks and shares ISA because I live in Germany. I realise I can't invest more funds in the ISA but I think I should be able to buy and sell shares within the ISA wrapper. My view is that this goes against the spirit of the ISA regulations and is quite possibly illegal. The Government say I should be able to retain the ISA and continue to use it should I return to the UK. In my view I am not retaining my ISA if I can't operate it. And to answer a previous question, I want to retain the ISA because if I liquidate it that could trigger a substantial capital gains bill in Germany where capital gains are taxed as income.

| improve this answer | |
  • Like I said - there are ISA providers in the UK who let you trade after you move out of the country. It has been 3 years since I did my research, so I am not sure if the information I provided in this thread is still all up to date, but I have had my ISA since then and been trading too, even though I have lived outside of the UK. – mac13k Mar 15 at 6:04

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.