US-UK · Journal
Keeping a US Brokerage Account After Moving to the UK
Moving to Britain with a US brokerage account? How the UK taxes US shares and ETFs, W-9 vs W-8BEN, treaty withholding, reporting funds and the PFIC mirror trap.
Moving to Britain with a US brokerage account? How the UK taxes US shares and ETFs, W-9 vs W-8BEN, treaty withholding, reporting funds and the PFIC mirror trap.
You can usually keep a US brokerage account when you move to the UK, but three things change at once. Your broker may restrict or close the account once your address is British; the UK starts taxing the dividends, interest and gains on an arising basis, computed in sterling; and US-domiciled ETFs and mutual funds fall into the UK's offshore funds rules, where gains on a fund without UK reporting status are taxed as income rather than capital gains. Whether you are a US person decides the rest.
Brokers decide for themselves which countries they will serve, and a change of residential address is the trigger they watch. When a customer's address becomes British, some US firms carry on as normal, some stop new fund purchases, and some ask the customer to transfer out. The usual reasons are the licensing and product rules of the customer's new country, not US tax law.
Find out your broker's policy in writing before you move. And do not solve the problem by leaving a US address you no longer live at on the account. The tax forms described below require your permanent residence address, and the W-8BEN instructions require you to tell the broker within 30 days when a change in circumstances makes the form incorrect.
Form W-9 is for US persons. The IRS instructions describe it as the form for a US person, including a resident alien. A US citizen is a US person wherever they live. A green card holder remains a US resident for tax purposes under the IRS green card test until that status is formally ended, for example by abandoning it in writing with USCIS. Both keep giving the broker a W-9 and receiving Form 1099s; backup withholding at 24% can apply if the taxpayer identification number is missing or wrong.
Form W-8BEN is for non-US individuals. The IRS instructions state that US citizens and resident aliens must not use it. A returning Briton with no US citizenship or green card should replace the W-9 with a W-8BEN once they cease to be US resident, giving the UK address and claiming UK treaty residence in Part II. A W-8BEN generally remains valid until the end of the third calendar year after it is signed, unless circumstances change sooner.
What the treaty claim does. US-source dividends paid to a foreign person are subject to 30% withholding by default. Under Article 10 of the US-UK treaty, portfolio dividends paid to a UK resident are capped at 15%, including dividends from US funds whose assets are mainly shares and securities. Without a valid W-8BEN, the broker withholds 30% and you must reclaim the difference.
Interest and gains for non-US persons. Article 11 of the treaty makes interest taxable only in the country where the beneficial owner lives. For gains on shares, the treaty's residual rule in Article 13 gives the taxing right to the country of residence, and IRS Publication 519 explains that a nonresident alien is generally taxed on capital gains only if present in the US for 183 days or more in the tax year. For a non-US UK resident, the US tax on a typical brokerage account therefore comes down to the 15% withheld from dividends.
The UK taxes residents on worldwide income and gains as they arise, even if the money never leaves New York.
Sterling is the measuring stick. HMRC's Capital Gains Manual (CG78310) requires the cost to be converted into sterling at the exchange rate on the date of acquisition and the proceeds at the rate on the date of disposal. It expressly rejects computing the gain in dollars and converting at the end. Keep dated trade confirmations, not just the year-end 1099.
Credit for US tax. Where the US has taxed the same income, you claim Foreign Tax Credit Relief on the UK return. The relief is limited to the treaty rate and to the UK tax on that income, so a basic rate taxpayer suffering 15% US withholding on dividends taxed at 10.75% in the UK loses the excess.
Reporting. US dividends and interest go on the foreign pages of the return (SA106). If you have not filed before, register for Self Assessment by 5 October following the end of the tax year; for 2025-26 that date is 5 October 2026, and the online return and payment are due by 31 January 2027. If your arrival year is split across two systems, our guide to the moving-year tax return covers the overlap, and our residence tool explains how UK residence is tested.
The foreign income and gains (FIG) regime was introduced on 6 April 2025. Under RFIG44000, a qualifying new resident was not UK resident for at least 10 consecutive tax years before arrival, and can claim relief for that year and the next three while UK resident. Qualifying foreign income includes foreign dividends, interest and offshore income gains; foreign chargeable gains are relieved separately, and relieved amounts can be brought to the UK without charge.
The claim has a price: under RFIG43000 it costs the personal allowance and the capital gains annual exempt amount for that year, and foreign losses in a claim year are not allowable. For a US citizen, removing UK tax leaves nothing for the IRS to credit, so the US charge stands in full. Our article on the FIG regime for US citizens works through the trade-off. Returning Britons qualify only after a full 10-year absence.
HMRC's Investment Funds Manual (IFM12282) says that exchange traded funds are usually operated at or very close to net asset value and so would be expected to fall within the definition of an offshore fund. A US-domiciled ETF or mutual fund is a fund based outside the UK, so the offshore funds rules apply to it.
Those rules divide funds in two:
1. Reporting funds. A fund that has obtained UK reporting fund status reports its income to investors each year. You are taxed on your share of its reportable income even if undistributed; that "excess reported income" is treated as received six months after the reporting period ends and added to your base cost. On sale, the gain is a normal capital gain.
2. Non-reporting funds. You are taxed only on distributions actually paid, but when you sell, HMRC's helpsheet HS265 explains that the gain is an "offshore income gain" charged to income tax, not capital gains tax. It is reported on page 6 of the SA106 and taxed at your marginal income tax rate of 20%, 40% or 45% for 2026-27, with no annual exempt amount.
Check the list, fund by fund. HMRC publishes a spreadsheet of funds that have successfully applied for reporting status, searchable by ISIN and CUSIP; it was last updated on 9 September 2026 and is refreshed monthly. A fund that does not appear should be treated as non-reporting for the periods in question. Individual US shares are not funds, so they stay in the ordinary capital gains regime.
The obvious fix for a UK resident, selling US ETFs and buying UK-listed UCITS ETFs with reporting status, creates a new problem for a US citizen or green card holder. Such funds are domiciled outside the US, and a foreign investment fund is generally a passive foreign investment company (PFIC) for US purposes. PFICs carry a punitive default tax regime and annual reporting on Form 8621. Holding them inside an ISA does not help, because the US does not recognise the ISA wrapper. Our guide to PFIC rules for US investors abroad explains the elections and their costs.
US funds are awkward in the UK; UK funds are awkward in the US. Individual shares at a US broker that keeps the account open are often the least complicated middle ground for tax, though diversification is an investment question.
The treaty's saving clause (Article 1(4)) lets the US tax its citizens as if the treaty did not exist, and Article 24(6) sets the order of relief:
Mismatches still bite: a US ETF gain may be taxed as income at 40% or 45% in the UK while the US treats it as a long-term capital gain, and credits are not always usable in the year or category you need. Model it before selling.
| Holding | US citizen or green card holder living in the UK | Non-US UK resident (for example, a returning Briton) |
|---|---|---|
| US individual stocks | US: taxed as usual, reported on 1099. UK: dividends taxed as dividend income; gains under CGT in sterling. UK credits up to 15% US tax on dividends; US credits the rest of the UK tax. Usually the cleanest. | US: 15% withholding on dividends with a W-8BEN; gains generally not US-taxed. UK: dividends and CGT as normal, with Foreign Tax Credit Relief for the 15%. |
| US-domiciled ETFs | US: ordinary domestic fund. UK: offshore fund; unless on HMRC's reporting list, gains are offshore income gains taxed at income rates, while the US treats them as capital gains. | US: 15% on distributions with a W-8BEN. UK: same offshore funds treatment. Check the reporting list before buying or selling. |
| UK-listed UCITS ETFs | US: generally a PFIC, with Form 8621 and punitive default rules. UK: confirm reporting status on HMRC's list. Avoid without PFIC planning. | US: no US tax. UK: normal CGT if the fund has reporting status. Often the natural choice, including in an ISA. |
| US mutual funds | As for US ETFs. Brokers may also stop new purchases once your address is foreign. | As for US ETFs, with the same risk of purchase restrictions. |
The figures below are illustrative. Tax rates are the verified 2026-27 rates for England; sterling amounts are assumed to be already converted at the rates on each transaction date.
Take a hypothetical British citizen who returns to London after several years working in the US. She has no US status and has given her broker a W-8BEN. She is a higher rate taxpayer who has already used her dividend allowance on other shares.
Dividends. Her US shares pay dividends worth £2,000. The broker withholds 15%, £300. In the UK the dividends are taxed at 35.75%, £715. Foreign Tax Credit Relief is the lower of the US tax and the UK tax on that income, so she credits £300 and pays £415 to HMRC. Total tax: £715. Without the W-8BEN, 30% (£600) would have been withheld, and the UK credit would still be limited to the 15% treaty rate, leaving £300 to chase back from the IRS.
Gains. She sells two holdings, each with a £10,000 gain in sterling:
Same gain, same broker, a difference of £2,320, determined entirely by the fund's UK reporting status.
Currency. A holding bought and sold for the same $10,000 still produces a taxable sterling gain if the pound weakened in between, because each leg is converted on its own date.
1. Ask your broker in writing what happens when your address becomes British.
2. Update your tax form: a current W-9 for US persons, a W-8BEN with a treaty claim for everyone else.
3. Check every fund's ISIN against HMRC's reporting funds list.
4. Record sterling base costs at each acquisition date's exchange rate.
5. Decide what to sell, and when. For a non-US person, gains realised before UK residence starts may fall outside the UK; for a US citizen, the US taxes the gain either way. Split-year and temporary non-residence rules can change this.
6. Model any FIG claim year by year, including the lost allowances.
7. Register for Self Assessment by 5 October after the first UK tax year.
If you hold US funds, are a US citizen with UK-listed investments, or are deciding what to sell around a move, the interaction of two tax systems is where errors become costly. Our US-UK expat tax accountants prepare both returns together, with a licensed CPA or Enrolled Agent reviewing and signing off the US side and an ACCA-qualified accountant the UK side. Our global tax calculator gives a first estimate, and you can book a consultation to have your own portfolio reviewed. This article is general information, not investment or tax advice for your circumstances.