About Non-US Investments
It’s common for British expats to own Non-US Investments (PFICs) and it’s usually a problem. Many people relocate to the US with existing collective investments, and many acquire them later on. For example, you inherit a GBP investment account and leave it as is because the exchange rate isn’t attractive.
Unless certain steps have been taken, most PFIC distributions will be considered “Excess Distributions” and will suffer punitive tax, interest, and reporting requirements in the US. This can get VERY expensive.
In most cases, the IRS views non-US collective investment funds unfavourably. Although they may seem harmless, they can lay the groundwork for a very unpleasant tax surprise.
What’s more, many account types (like a pension, ISA, endowment, insurance bond, etc.) may not provide any protection from tax treatment as a PFIC.
If you own PFICs, address it ASAP. Waiting makes it worse! Subscribe to our YouTube channel to get more essential information about retiring in the United States.
Plan First Wealth LLC is a Registered Investment Adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that Clients seek their own advice in these areas.