Stocks & Shares ISA -- going to move abroad soon, but might return to UK for retirement

LoremIpsum

Hi,

I'm in my mid 40s, currently still in the UK but will move abroad in 3-4 months. Hence I want to tidy up my ISA here, as I can't change/add once I move away...

I have an existing Cash ISA, which I'd like to transfer into an ETF-based Stocks & Shares ISA, very much as a long-term investment. Ideally an accumulating ETF / no dividends. And of course no more paying into the ISA after I've moved abroad.

For retirement, we'd be moving back to the UK in about 20 years. So, long-term "buy once and hold" investment, probably into a MSCI World, FTSE Developed World or similar.

Question is:

Let's say I move £10k into a Stocks & Shares ISA, and let it accumulate over 20 years (whilst living abroad), then become tax resident in the UK again before I sell & transfer out: Will this all be tax free? And will I be able to transfer out everything in one transaction?

(Providing laws / rules don't change by then, of course).

 

As for platforms, I was looking at either iWeb (£100 one-off setup fee, no annual fee). Or Vanguard (if I can't find a suitable ETF on iWeb).

Do you have any other recommendations / things I should be aware of? Will iWeb and Vanguard allow me to keep my ISA with them if I move abroad?

Many thanks!!

Thrugelmir

You'll also be subject to the tax regime of the jurisdication you move to. The tax status of ISA's might not be recognised. 

LoremIpsum

If I buy today, and never sell until I move back to the UK, I'm not generating any gains. (Apart from dividends). Same as I'm not generating any losses.

So why would it be dependent on where I'll be tax resident for the next 20 years?

Stock market goes up & down all the time. If you buy shares today (from a company that doesn't pay dividends), then you don't mention those shares to HMRC, until the moment comes when you sell them.

EdSwippet

LoremIpsum said:

So why would it be dependent on where I'll be tax resident for the next 20 years?

For an example, see the US's spiteful PFIC tax rules, applied to all non-US domiciled funds and ETFs (this is one of the things FeralHog was referring to earlier):

Passive foreign investment company - Wikipedia

The "mark to market" treatment taxes unrealised gains annually. There are two other options under PFIC, but one will be unavailable to you (virtually no non-US fund is eligible for a "QEF election"), and the other, section 1291, applies tax at the highest marginal rate in existence, plus interest on prior year gains, to produce a tax rate that over time will exceed 100% of your gains.

You will get less vague answers if you say which country you will move to. It is particularly futile for you to extrapolate to other countries what the UK and HMRC do (and don't do) regarding investment income.