US domiciled ETFs that are UK HMRC reporting funds

 lists a selection of US domiciled exchange-traded funds (ETFs) that meet UK HMRC reporting fund requirements.

US citizens and US permanent residents (green card holders) living in the UK can hold the funds listed below without running into problems with the US's harsh Passive foreign investment company (PFIC) tax regime, and also without running into higher UK tax because they hold HMRC non-reporting funds. The information in this article is specific to US citizens and US permanent residents who are UK residents.

Introduction
If you are a US citizen or US permanent resident (green card holder) living in the UK, then because of the way the US's citizenship-based taxation and harsh Passive foreign investment company (PFIC) tax regime intersect, you cannot use the normal range of UCITS funds and ETFs offered to other UK and EU residents. For you, holding US domiciled funds or ETFs is one of very few viable routes to index investing.

However, the UK also has rules that discourage some "offshore" fund holdings. You would pay tax on gains in a non-UCITS fund or ETF that lacks HMRC reporting status at higher income rates, instead of lower and more beneficial capital gains rates.

Many US domiciled funds and ETFs will not have HMRC reporting status. However, some US domiciled ETFs - including most Vanguard and Dimensional ETFs - are HMRC reporting funds. This means that you can invest through these ETFs without running into either country's unpleasant tax regime for "offshore" funds.

US domiciled ETFs with HMRC reporting status
The following tables show a selection of US domiciled ETFs that you can safely use in taxable accounts. These are also safe to use in a UK Individual Savings Account (ISA), although for you the ISA wrapper only provides protection from UK taxes, not from any US taxes. The US will tax your ISA gains annually as if it is a normal taxable account.

The tables show data from HMRC's approved offshore reporting funds list, as of 8 September 2023. This list shows funds by CUSIP. The mapping from CUSIP to fund exchange ticker uses data from OpenFIGI, as of 8 September 2023.

If you are going to rely on the information in the tables, please first check these sources to ensure that the table data remains accurate. These tables are not an exhaustive list of all US domiciled ETFs that are HMRC reporting funds.

Problems caused by FATCA and PRIIPs
After FATCA in 2010, many UK financial institutions and brokerages started to refuse accounts for US citizens and green card holders, even those living in the UK. At the same time, some US brokerages began shutting off access for US citizens and green card holders living outside the US.

In 2018, the European PRIIPs (Packaged Retail and Insurance-based Investment Products) regulation became effective. As a result it is now difficult or even impossible for EU residents to purchase US domiciled funds directly (although indirect purchases potentially remain possible ). Shares purchased before the regulation came into effect can be kept and sold, but EU residents can generally no longer buy new shares of these funds or ETFs. The UK left the EU in January 2020, but created its own 'UK PRIIPs' regime that is fully aligned with the EU PRIIPs, so PRIIPs restrictions continue to apply in the UK.

If you are a US citizen or green card holder living in the UK, the way these restrictions combine severely limits your options for holding US domiciled ETFs with HMRC reporting fund status. You can use US brokerage accounts to access US domiciled ETFs, but getting access to a suitable account may be difficult; for example, you may have to open it using a US address.

Effects of ETFs gaining or losing HMRC reporting status
You need to pay close attention to the "HMRC reporting since" column in the table above. HMRC has different tax rules where you hold an ETF or other "offshore" fund outside of any period in which it is an HMRC reporting fund.

PFICs in UK pensions
Under regulations issued by the IRS in 2016, there is an exemption to PFIC reporting for any funds you hold in UK pensions. Here, the US/UK tax treaty protects you from PFIC rules, so that you can hold any funds you like in a UK pension, without being affected by these rules.

Non-reporting funds in US pensions
Symmetrically with the above, the UK's HMRC reporting funds regime only applies to funds you hold outside of UK tax-sheltered accounts. Holding non-reporting funds in a US pension, including Roth accounts, causes no tax problems. (Also, no problems in a UK pension or ISA, to the extent that PRIIPs does not prevent you from using them at all inside UK based accounts.)