Reporting Funds (Across the Pond Podcast – Ep. 6)
We’re talking about reporting funds and non-reporting funds for UK taxpayers. You might be wondering why we’re doing this since we work with British expats, but the reason is simple: some people go back!
Reporting funds are a subset of “offshore”* collective investments where the fund has applied to HMRC for “reporting fund” status (all US funds & ETFs are by definition offshore funds to HMRC). Once this status is granted, the fund is required to report to the investor and HMRC details of the income that has arisen within the fund, and whether or not the income has been distributed to the investor.
If an offshore fund has not been granted reporting fund status, then it is a non-reporting fund.
Non-reporting funds do not report any accumulated income to HMRC. Therefore, the investor is liable for UK tax only on income that has been distributed – i.e. the fund distributes some income and/or the investor sells some/all of their holding in the fund.
If you find yourself back in the UK you’ll want to know about reporting and non-reporting funds and how they might impact you personally. It will cost you less in terms of money and stress to seek advice from UK/US cross-border professionals before you make your move in either direction. It is better to prepare than to repair.
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.