Author Topic: US citizen living in UK, UK business owner with US client: how best to invest?  (Read 1131 times)

buildsucceeded

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As in the title, I'm a US citizen. I live in the UK and am about to get permanent residency here. Might stay here forever, might end up back in the US or in Canada (where my wife is from).

I do contract software development through my own limited company here, which means it's tax-efficient to leave as much money as possible inside the company. This means I'm looking for a way to invest this money _as a company_ rather than withdraw it, pay 40-50% tax, then personally invest what's left. (The idea being that I'll withdraw it when I'm not earning a salary, pay it to myself ideally as dividends, and pay only 20%)

I've talked to a financial advisor who has explained (as also described on other forum posts) that it gets very complex when a US citizen wants to do any sort of investment outside the USA. He says there's a list of 'pre-approved' investments which he'd pull from to create my portfolio, which keeps the IRS happy.

I don't want to go with this financial advisor (because duh, fees of ridiculosity) but it sounds like it's not possible to just open an investment account as a company, buy VSTAX/whatev, and go about my business… does anyone know if I'm wrong about that?

Side tangent, since my company's main client is a US company, it would be possible for me to divert that income to a US account, pay US income tax and buy VSTAX personally. This would be simpler once bought, but potentially complicating in that I currently file for UK and US tax but only end up owing UK tax; my US tax returns are very simple.

Background: I'm just getting into lucrative employment after a young-adulthood as a struggling artist, so it's early days and sub-£100k amounts of money are (so far) involved. I want to set this up right, though, of course, and not have to switch gears in a couple years or realize later that I've paid thousands in fees for no reason.

Anyone (a) know enough about US/UK tax/investment law to give me some advice? And/or (b) anyone want to check my math and make sure I'm not overlooking some other, better strategy?

P.S. My wife has a similar situation but she's Canadian and has more money than me (she's the true Mustachian) so, y'know, advice there too if you've got it!
« Last Edit: August 21, 2017, 03:05:49 PM by buildsucceeded »