What happens if i moved out of Europe? Brazil or Australia

I have family in both Australia and Brazil. I was considering moving to one of them.

If i did, what happens to my ISA with Trading 212?

Is it transferable to a new ISA or even, am i able to use trading 212 the same as i woulf have in the UK. Would anything change?

1 Like

Here you have the answer:

Thanks but im wondering if im able to continue using trading 212 (isa or otherwise) if i moved to for example Brazil or the USA?

@Dallaz

  • If you move to the US, and you start paying taxes there - you cannot use our service at all, due to the regulations of the Dodd-Frank act and the FATCA agreement.

  • In regards to the rest of the world - you can use our service as long as there aren’t any local restrictions.

The above applies to both CFD and Invest accounts.

As of the ISA - I’ll quote the link from my previous reply:

If you open an Individual Savings Account (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).

You must tell your ISA provider as soon as you stop being a UK resident.

However, you can keep your ISA open and you’ll still get UK tax relief on money and investments held in it.

You can transfer an ISA to another provider even if you are not resident in the UK.

You can pay into your ISA again if you return and become a UK resident (subject to the annual ISA allowance).

2 Likes

Hm, what if I wanted to sell shares or liquidate the ISA while abroad? I suppose I’d have to talk to the local tax office then? I’m sure they want in on the action, despite U.K. tax-freeness.

The ISA would be UK domicile so your local tax office will have no say in the matter and cannot claim any taxes on those funds.

I am surprised about this… I would have thought that the “new” tax office would try to charge you taxes on it.

The US will definately assess dividends in an ISA for tax if the owner is a US taxpayer. There is no sense in which UK domicile of the ISA protects against US taxation. A US citizen living in UK can open an ISA which will then be UK tax free but not US tax free. Some UK platforms will accept US persons as customers provided they are not US resident. Others do not accept any US persons as customers even if they live in UK because FATCA reporting is too burdensome.

What if you open an ISA whilst living in the UK and then move to another European country? (As a UK or EU citizen)
I guess the ISA would also be taxed in that case (tax on dividends and gains upon sale of shares).

Yes. Apart from the US and Eritrea (which have citizenship-based taxation), countries generally operate residence-based taxation of a resident’s worldwide income. Income in an ISA is only UK tax exempt for UK residents. However, one would need to look carefully at the particular country’s specific rules for taxation of offshore income. Usually the rules say that all worldwide income is taxable.

A little search can find out. E.g. for Germany: “Many expats moving to Germany often hold PEP’s, ISA’s, Premium Bonds etc. However whilst these are excellent products for a resident of the UK, they are not recognised under German Law and therefore are not a tax efficient savings or investment solution. They are likely to be taxed as funds and hence liable to yearly taxation on interest, dividends and realised gains at the rate of 25% Abgeltungssteuer plus 5.5% solidarity tax and church tax (Kirchensteuer) where applicable.”

1 Like

I was on the phone with HMRC and my old German tax office, and if I understand correctly, this tax stuff is always codified in a “double-taxation treaty” between two countries. So you need to check with the tax office or an expat tax advisor BEFORE you leave your country to live somewhere else, and the details differ from country to country. I hear e.g. that U.K. expats moving to Thailand may be in for a rude tax awakening for some reason.

In the specific situation of residing in the U.K. and selling shares in Germany, capital gains you make are taxed in Germany (801€ allowance, then 25% and maybe a bit more) and you report the gain to both HMRC and the German tax office. HMRC will then tax you more if selling the shares in the U.K. would have been taxed higher. Otherwise, you get tax credit or something. At least that’s what I think I understood.

I am still biting myself for moving a large pile of GBPs to Germany because at that point I didn’t know about ISAs and T212. Live and learn :sob:

the Thailand tax I have heard mention of before, but I never looked into exactly how bad it was.

If I do plan to move for some reason I will likely liquidate my ISA then and there, so any transfer of savings is handled before the move and no need to worry about closing the account later and jumping through all these additional hoops.

2 Likes

See Article 13, paragraph 5 (page 16). I think that if you are resident taxpayer in the UK then you pay capital gain tax only in the UK - unless paragraph 2 applies, which unlikely.

Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3 shall be taxable only in the Contracting State of which the alienator is a resident.

1 Like

Oooooh! Thanks for digging this out. Now I’m completely confused. Did the German tax office tell me something wrong or did I just misunderstand them (possible). Oh well. Back to the phone I guess…

Also: extra reportable income, gotta find out about that…

I have had many conversations with tax officials. Their advice is not to be 100% trusted. The US ones, after an hour waiting on the phone, are simply terrible. The best person to ask is a UK tax accountant (which I am not). Maybe Germany has some sort of automatic capital gains tax - but I cannot see how this could be calculated. If so, it would be allowable against UK tax. But my suspicion is that the people you spoke to were confused. Generally, capital gains on shares are taxed by country of residence, no matter where the shares were initially bought and are held. The opposite is true with immovable property like houses.

1 Like

It’s called “excess reportable income”. You are on a journey of discovery. Have fun.

That’s good to know. This stuff is so convoluted that you basically have to hire an expert or try to avoid the subject entirely…

It’s called “excess reportable income”. You are on a journey of discovery. Have fun.

I learned more about all of this stuff in the last months than I ever wished to know and I still feel like I’m flying blind :sob:

I agree with selling everything before moving because if you lock in the profits in an ISA whilst you are still a UK tax resident then you don’t pay any taxes, whereas if you sell the investments and move them once you are a tax resident somewhere else you will pay taxes, even if you bought them when you lived in the UK within a tax-free item (ISA).

At least that is how I understand it.