US/Italian Citizen Living in UK

mromano

From what I can understand, due to US Tax laws, some platforms don't allow US citizens to open Stocks & Shares ISA accounts. What would happen if I don't declare my US citizenship during the application process, but instead only list my Italian citizenship?

Neruda

The provider could face a lot of trouble from the US authorities if that happened. So if they found out they would probably close your accounts and blacklist you, and you would face considerable inconvenience.

eskbanker

mromano said:

From what I can understand, due to US Tax laws, some platforms don't allow US citizens to open Stocks & Shares ISA accounts. What would happen if I don't declare my US citizenship during the application process, but instead only list my Italian citizenship?

Are you just looking to deceive a UK provider or the US tax authorities as well?

My admittedly limited knowledge of FATCA is that US citizens are obliged to declare all worldwide income to the IRS, regardless of residency, and that ISA income and/or capital growth is still subject to US taxation even if it's sheltered from the UK equivalent, thereby negating (or at least considerably watering down) the benefits of the wrapper....

mromano

The thought was more of a platform preference and wanting to use a particular provider, as some don't allow US citizens to open accounts - not so much wanting to dodge the taxman.

eskbanker

mromano said:

The thought was more of a platform preference and wanting to use a particular provider, as some don't allow US citizens to open accounts - not so much wanting to dodge the taxman.

In simple common sense terms, if a platform doesn't allow US citizens to open accounts, then a US citizen who happens to hold another citizenship would still be disallowed, but you'd need to study the actual wording carefully before making any binding declaration....

bostonerimus

mromano said:

The thought was more of a platform preference and wanting to use a particular provider, as some don't allow US citizens to open accounts - not so much wanting to dodge the taxman.

As a US citizen the ISA has no tax advantage for you as you will have to pay US tax on any ISA gains. Also you are severely limited in what sort of non US investments you should hold in anything outside of a pension wrapper as punitive PFIC tax rules will apply.