UK Lifetime ISA

Forum|Forum|7 years ago
June 5, 2019
3 replies
28 views

I have a lifetime ISA in the UK. HMRC paid a bonus into it after I became resident in the USA in 2018. Is this taxable in the USA, and if so, where do I enter it on my US tax return?

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KarenJ2

Level 13

It will be taxable on your US tax return. I believe you should have a tax professional familiar with PFICs (passive foreign investment company) prepare your return(s). TurboTax does not handle PFICs. They are very complicated and can subject you to high penalties.

Please review what you can find on PFICs and the Lifetime ISA. A couple websites are listed below.

You do not want to take a distribution from your ISA while in the US. If a dividend is reinvested into your account, it is considered a PFIC and will need to be reported as such. Also, you will probably have FBAR (Foreign Bank and Financial Accounts) and Form 8938 fiing requirements.

https://www.ft.com/content/00fb483c-92a1-11e5-bd82-c1fb87bef7af

https://thunfinancial.com/home/american-expat-financial-advice-research-articles/american-expat-pfic...
https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

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