American tax increases for thousands right here in the UK

We are indebted to David Treitel of American Tax Returns Ltd for the following:

Many of the recent stories in the press fail to mention that even for many of the lowest earning Americans in the UK, US tax payable on income and gains on many investments will also increase substantially this year.

US law states that the rate of tax applied on “bad investments” is always the maximum rate – whether or not the individual is otherwise subject to tax at this rate. “Bad investments” include all UK unit trusts, investment trusts and similar collective investments – including those held in ISAs.

Additionally, for calendar year 2012 the IRS are now insisting in significantly more reporting of all of these investments.

Technical note: Investments outside of the United States may be taxed under the Passive Foreign Investment Company (or PFIC) regime which can result in an income tax charge at the top Federal rate plus an interest charge. The rate of tax plus interest can be close to 100%, making these investments extremely “unfriendly” from a US tax perspective. The President signed into law in 2010 an obligation for increased reporting of such investments, which the IRS suspended for calendar year 2011 returns, but which seems likely to be mandatory for calendar year 2012 returns due to be filed during 2013

For more, please get in touch with David Whiscombe or your usual BKL contact.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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