Offshore funds that have successfully applied to HMRC for reporting fund status can be held by US residents and be tax efficient. The list below allows investors to check for US domiciled investment funds (ETFs, mutual funds and index funds) that may be held in US brokerage accounts. The table below allows investors to check whether the investment funds they own are tax-optimal for US and UK citizens. If a fund is not on the list, the UK tax authorities will tax gains at income tax rates rather than capital gains. Commonly, these funds are not available on the UK investment platform because of rules related to packaged investment products that these US funds do not comply with.
US Mutual Funds with UK Reporting Status
Additional information for US UK taxpayers linked to US-domiciled investment funds
US taxpayer investment woes are more complicated because of European Union restrictions on packaged retail and insurance-based investment products (PRIIPs). These narrow investment choices within the European Union and the United Kingdom prevent buying US-domiciled investment funds for retail investors. The PRIIPs regulations started to apply in January 2018 and established special requirements for investment products throughout the European Union. Existing investment funds bought before the EU PRIIPs regulation can continue to exist and be traded but EU residents cannot acquire new shares in these funds after PRIIPS implementation in 2018. The PRIIPs rule was implemented in the United Kingdom after Brexit, so the restrictions on investment choices accessible through U.S. and U.K. investment custodians remains.