PFIC analysis and Form 8621, for the funds you already hold.
Most UK funds, index trackers and ETFs are Passive Foreign Investment Companies to the IRS — including everything inside a Stocks & Shares ISA. The default tax treatment is punitive, and the reporting is the most technical form in expat filing.
Figures on this page are stated for tax year 2025/26 UK · 2025 US. Thresholds change annually.
Your ISA is not invisible to the IRS
The ISA wrapper means nothing in US law. Each fund inside it is tested separately, and a fund that is a PFIC drags gains into the excess-distribution regime: taxed at top rates with an interest charge running back through your holding period.
We identify which holdings are PFICs, prepare Form 8621 for each, and where available make the QEF or mark-to-market elections that convert the treatment into something rational.
- Holding-by-holding PFIC determination
- Form 8621 preparation for each reportable fund
- QEF and mark-to-market elections where beneficial
- Restructuring advice for portfolios that cannot be fixed
Sometimes the answer is to sell, carefully
For long-held PFICs the elections are often unavailable and the arithmetic favours a purge — realising the position, paying the historic charge once, and reinvesting in US-compliant funds. We model the cost of leaving versus staying so the decision is made on numbers, not fear.
Then a portfolio both systems leave alone
The end state matters as much as the clean-up: a portfolio of US-domiciled ETFs with HMRC reporting status is taxed rationally by both authorities — capital gains treatment in the UK, ordinary fund treatment in the US, and no Form 8621 in sight.
We hand you the design and the platform options that can actually hold those funds for UK residents, so the problem is solved once rather than annually.
- US-domiciled, HMRC-reporting fund shortlist
- Platform options that serve UK-resident US persons
- Wrapper strategy: what to fund and what to freeze
What the fixed fee includes
- Holding-by-holding PFIC determination via ISIN
- Form 8621 for every reportable fund
- QEF and mark-to-market elections where available
- Excess-distribution computations done correctly
- Purge-vs-hold modelling with real numbers
- US-friendly, HMRC-reporting replacement shortlist
- UK reporting-fund status checks in the other direction
- Broker instructions for the restructure
How the engagement runs
Often handled together
Questions we get about this
A separate Form 8621 for each fund, for each year you hold it, once your total PFIC holdings pass the de minimis exception - $25,000, or $50,000 filing jointly, with no distribution or disposal in the year.
Somebody holding a modest portfolio of a dozen funds can generate more forms than their entire tax return would otherwise need.
The default regime still applies to the disposal, and the interest charge is calculated across the whole holding period.
Selling in a rush is not always the right answer - it can crystallise the worst treatment rather than avoid it.
They are outside the PFIC regime, which removes the US problem. But if you are UK resident, HMRC reporting fund status becomes the question instead.
The workable answer is usually a fund recognised by both systems, not one optimised for either.
The ISA wrapper itself is not, but what sits inside it usually is. Unit trusts, OEICs and investment trusts are almost all PFICs under US rules.
The wrapper also gives you nothing on the US side - the IRS does not recognise it, so income and gains inside are taxable to you as they arise.
The default regime taxes gains at the highest ordinary rate and adds an interest charge as if the gain had built up evenly over the years you held it.
The reporting burden is also disproportionate once you are past the de minimis exception: a separate form per fund, per year.
Often, yes. A mark-to-market election taxes the annual movement instead and removes the interest charge, which is usually far better.
The catch is timing. Elections generally have to be made in the right year, which is why this is worth looking at before a holding has grown for a decade.
Yes. It means choosing the account type and the funds inside it with both systems in view, rather than discovering the problem at filing.
Equivalent exposure held through US-domiciled funds or direct holdings often sidesteps PFIC treatment entirely.
Last reviewed · Figures stated for tax year 2025/26 UK · 2025 US. Thresholds and rates change annually — check figures against the current tax year before relying on them.
Holding UK funds as a US person?
We will work out the exposure, whether an election improves it, and what a portfolio both systems leave alone would look like.