What happens to your ISA when you move abroad?
An individual with an ISA must also tell the ISA manager if they cease to meet the residence qualification because they have become:
- non-resident,
- have ceased to perform duties as a Crown employee serving overseas, or
- have ceased to be the spouse/civil partner of a Crown employee serving overseas.
If this happens, an existing ISA does not need to be closed – it will still retain the tax benefits (although they may be subject to taxation in their new country of residence). But no further subscriptions to the ISA can be made unless the individual meets the residence qualification again.
Non-UK residents can still make:
When an ISA manager is notified of a new overseas address, but the individual has not made a declaration that they are non-UK resident, the ISA manager can continue to accept subscriptions on the basis of the existing resident declaration for the remainder of that tax year. Subscriptions should not be accepted for the following tax year or until the individual confirms in writing that they expect to be resident in the UK, where appropriate by completing a fresh application. This does not apply for a Lifetime ISA.
The ISA manager can adopt one of two approaches:
- From the date of notification of the non-UK address, they can tell the individual that any further subscriptions will be refused unless the individual confirms they expect to be resident in the UK for the tax year of departure, or
- Tell the individual they will continue to accept subscriptions for the tax year of departure unless the individual tells them they don’t expect to be resident in the UK for any of that tax year.
What happens if subscriptions are made in a tax year where the individual is non-resident?
All subscriptions to an account, including any income and/or growth relating to those subscriptions, made in tax years in which they were non-resident must be removed from the ISA. (This excludes any subscriptions that non-UK residents can make – see What happens when somebody moves overseas? above)
If the individual declares during a tax year that they expect to be non-resident, as this is not a categorical declaration of non-residence no subscriptions should be removed (voided). Only if the individual subsequently confirms that they are non-resident for that tax year should any subscriptions made in that year be removed.
The exception to this is for a Junior ISA. Subscriptions to a Junior ISA can continue even if the child becomes non-resident in the UK and that Junior ISA can be transferred between ISA manager. A new Junior ISA could not be opened on behalf of such a child.
What happens if the individual declares they are non-UK resident but later establishes they are?
If the individual declares in the tax year that they are non-resident and the subscriptions are removed and they later establish they were actually a UK resident, the subscriptions cannot be reinstated after the tax year end.
What happens if the individual becomes a resident in the UK again?
If the individual again becomes UK resident, they should make a declaration to confirm they are a UK resident and provide their permanent UK address. It is not necessary for them to complete a full new ISA application for an existing account.
This does not apply to Lifetime ISAs as the declaration contained within the application form has effect for each tax year in which the individual makes a subscription to the account.
Can a US person open an ISA, if they are resident in the UK?
It depends. Some ISA providers may decline applications from US persons (such as US citizens), even if they are UK residents. This is primarily due to the complexities surrounding US tax obligations and reporting requirements.
