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Where Taxpayers and Advisers Meet

Move to UK - IB account

Ella16
Posts: 1
Joined: Fri Jun 05, 2020 4:37 pm

Move to UK - IB account

Postby Ella16 » Fri Jun 05, 2020 4:45 pm

Hello everyone,

I am a Belgian national currently living in The Netherlands, and will soon move to the UK for a new job…I will then become UK resident / non-dom.

I currently have an Interactive Brokers (UK) account, in which I have cash (mostly euro) and ETF’s (mostly listed on Euronext Paris).
Would there be any tax issues if I simply keep things as they are and move to the UK? To my mind, there should not be any tax implications:

- the ETF’s are not UK-listed…I suppose they count as foreign assets ?!
- the cash hardly pays any interest…there is no income anyway to be taxed.

But it would be good to be sure, especially about the ETF’s. Does it matter at all that they are held in a UK brokerage account, even though the ETF’s themselves are foreign…I would think not?

Thanks a lot!

DavidTreitel
Posts: 226
Joined: Thu Aug 16, 2012 4:31 pm

Re: Move to UK - IB account

Postby DavidTreitel » Sat Jun 06, 2020 6:55 pm

The ETFs are inevitably going to be invested in non-UK reporting funds; which are not obvious choices for a UK resident. HMRC kindly list all reporting funds here: https://www.gov.uk/government/publications/offshore-funds-list-of-reporting-funds

Ant136
Posts: 1
Joined: Sun Jun 07, 2020 12:10 pm

Re: Move to UK - IB account

Postby Ant136 » Sun Jun 07, 2020 12:14 pm

As far as I understand, it does not matter if the brokerage is UK-based, as long as the assets are not UK. On the euro cash you might want to be careful, as FX moves could translate into gains/losses.

AGoodman
Posts: 1046
Joined: Fri May 16, 2014 3:47 pm

Re: Move to UK - IB account

Postby AGoodman » Thu Jul 02, 2020 4:46 pm

You say you will be non-dom (you probably will) but do you plan to elect for the remittance basis? It comes with a cost. You don't have to pay the charge for seven years but you will lose your income tax personal allowance and CGT annual exemption which means you pay tax on your first £10k of income (but wouldn't otherwise) and first £12,300 of gains (but wouldn't otherwise). The loss of the personal allowance alone would cost you £4,000 if you are a higher rate taxpayer (over about £38,000 of income).

The location of the brokerage account is relevant to the remittance basis if you sell and the proceeds are then paid into the UK bank account used by the brokerage. That would be a remittance.

Incidentally, the consequence of holding a non-reporting ETF is that gains are subject to income tax (up to 45%) rather than CGT (£12,300 tax free and then up to 20%).

There are plenty of reporting status ETFs aimed at the UK market so you could just switch investments (albeit you may have Dutch tax on the gains). Once in the UK, you could invest £20k per year via an ISA and suffer no UK tax on income or gains within the wrapper. Several UK brokers will provide an ISA account that you can run just like a regular broking account.


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