If you’re one of the lucky ones hopping on a plane to up sticks to sunnier lands than the UK (for a long-term or permanent move), then you need to think about what to do with your ISAs. Since ISAs are legislated by the Government and are designed for UK citizens to save and invest, moving abroad can complicate matters. Luckily, we’ve got all you need to know.
What is an ISA?
An ISA (Individual Savings Account) is a government legislated type of saving or investment which allows you to put money into a tax-efficient way of saving.
An ISA allows an individual to put approximately £20,000 into any ISA account each tax year. This money is then kept in a tax free wrapper – essentially, this means that any returns generated either by interest or from investment, are not subject to capital gains tax or income tax.
I’m moving abroad – what do I need to know about my ISAs?
ISAs are intended to be used by residents of the United Kingdom. That means that if you are planning to move abroad, then there will be changes to the way you are able to use your ISAs.
You will still be able to hold your ISA accounts, and they will still accrue interest tax-free.
However, you cannot put any money into your ISA after the tax year that you move, or open any more ISAs during the period you are living aboard. This means you are sacrificing your £20,000 allowance for the tax year that you move abroad.
There are exceptions to this rule – those who are Crown employees who are working overseas (and the spouses/civil partners of these individuals) are exempt.
You must also let your ISA provider know when you have moved abroad and ceased being a UK resident.
You can also still transfer your ISA to another provider should you be unhappy with the current deal you have.
Can I never put money into my ISA again if I move abroad?
You can put money into an ISA again if you’ve lived abroad – you just need to move back to the UK in order to do so.
Once you once again become a UK resident, you will be able to open as many new ISAs as you wish – within the regulations, of course.
This applies to all ISA accounts – Cash ISAs, LISAs, JISAs, Investment ISAs etc.