Expat ISA Rules
We all know that Individual Savings Accounts (ISAs) are incredibly tax-efficient savings and investment vehicles for UK residents.
However, ISA rules for expats are more complicated.
For those of us who leave the UK, things become even more complex.
Here are answers to some of the most common expat ISA questions that I have come across.
Can I open an ISA while living overseas?
No.
Can I keep an existing ISA open, once I move abroad?
Yes.
However, you should inform your ISA provider as soon as you stop being a UK resident.
Can I pay into an ISA if I live abroad?
No.
If you open an ISA in the UK then move abroad, you cannot put money into it after the tax year that you move (unless you’re a Crown employee working overseas or their spouse or civil partner).
Can I transfer my existing ISA to another provider?
Yes.
Can I switch funds within my existing ISA while living overseas?
Yes (but it could be a taxable event in your country of residence, see next question).
The UK uses the Statutory Residence Test (SRT) to determine whether you are a UK resident for tax purposes. Check your status now . . .
Are ISAs still tax-efficient while I live overseas?
It depends on where you live and the double taxation treaty between that country and the UK.
Most countries tax residents on worldwide income and/or capital gains. In countries like Poland, France, Spain, and the US, ISAs are not recognised, and you would be taxed locally on any gains or income.
If you didn’t sell any ISA holdings while overseas and returned to the UK, the ISA would retain its tax efficiency (except in countries with a wealth tax).
Is there a pan-European equivalent to an ISA?
Unfortunately not.
