Vanguard US domiciled ETFs that are HMRC reporting funds

From Bogleheads
Jump to: navigation, search
UK flag.png Flag of the United States.svg.png This page contains details specific to United States (US) citizens and US permanent residents (green card holders) living in the United Kingdom (UK).

This page lists Vanguard's US domiciled exchange-traded funds (ETFs) that meet UK HMRC reporting fund[1] requirements. US citizens and US permanent residents (green card holders) living in the UK can hold these funds 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 it is specific to US citizens and US permanent residents who are UK residents.

Introduction

US citizens and US permanent residents (green card holders) living in the UK cannot use the normal range of UCITS funds and ETFs offered to other UK and EU residents, because of the way the US's citizenship-based taxation and harsh Passive foreign investment company (PFIC) tax regime intersect. For these investors, holding US domiciled funds or ETFs is one of the few viable ways to hold collective investment vehicles.

However, the UK also has rules that discourage some "offshore" fund holdings. Gains in a non-UCITS fund or ETF that lacks HMRC reporting status[1] are taxed to the investor at higher income rates, rather than lower and more beneficial capital gains rates.

Many US domiciled funds and ETFs will not have HMRC reporting status. However, a selection of Vanguard's US domiciled ETFs are HMRC reporting funds. A US citizen or green card holder living in the UK can therefore invest through these ETFs without running into either country's unpleasant tax regime for "offshore" funds.

Vanguard US domiciled ETFs with HMRC reporting status

The following table summarises Vanguard US domiciled ETFs that a US citizen living in the UK can safely use in taxable accounts. These would also be safe to use in a UK Individual Savings Account (ISA), although for US citizens and green card holders the ISA wrapper only provides protection from UK taxes, not from any US taxes. The US will tax ISA gains annually as if it is a normal taxable account.

The table shows data from HMRC's approved offshore reporting funds list, as of 17 Oct 2019. This list shows funds by CUSIP. The mapping from CUSIP to fund exchange ticker uses data provided by DTCC, as of 18 Jul 2019.

Investors planning to rely on the information in this table should first check the above sources to ensure that the table data remains accurate. Also, note that this table may not be an exhaustive list of all US domiciled ETFs that are HMRC reporting funds.

Vanguard US domiciled ETFs that are UK HMRC reporting funds
Fund name ETF ticker Fund CUSIP HMRC reporting since
Vanguard Mega Cap Growth Index Fund - ETF Shares MGK 921910816 1 Sep 2010
Vanguard Mega Cap Value Index Fund - ETF Shares MGV 921910840 1 Sep 2010
Vanguard Mega Cap Index Fund - ETF Shares MGC 921910873 1 Sep 2010
Vanguard Utilities Index Fund - ETF Shares VPU 92204A876 1 Sep 2010
Vanguard Telecommunication Services Index Fund - ETF Shares VOX 92204A884 1 Sep 2010
Vanguard Materials Index Fund - ETF Shares VAW 92204A801 1 Sep 2010
Vanguard Information Technology Index Fund - ETF Shares VGT 92204A702 1 Sep 2010
Vanguard Industrials Index Fund - ETF Shares VIS 92204A603 1 Sep 2010
Vanguard Health Care Index Fund - ETF Shares VHT 92204A504 1 Sep 2010
Vanguard Financials Index Fund - ETF Shares VFH 92204A405 1 Sep 2010
Vanguard Energy Index Fund - ETF Shares VDE 92204A306 1 Sep 2010
Vanguard Consumer Staples Index Fund - ETF Shares VDC 92204A207 1 Sep 2010
Vanguard Consumer Discretionary Index Fund - ETF Shares VCR 92204A108 1 Sep 2010
Vanguard Extended Duration Treasury Index Fund - ETF Shares EDV 921910709 1 Sep 2010
Vanguard S&P Small-Cap 600 Growth Index Fund - ETF Shares VIOG 921932794 1 Sep 2010
Vanguard S&P Small-Cap 600 Value Index Fund - ETF Shares VIOV 921932778 1 Sep 2010
Vanguard S&P Small-Cap 600 Index Fund - ETF Shares VIOO 921932828 1 Sep 2010
Vanguard S&P Mid-Cap 400 Growth Index Fund - ETF Shares IVOG 921932869 1 Sep 2010
Vanguard S&P Mid-Cap 400 Value Index Fund - ETF Shares IVOV 921932844 1 Sep 2010
Vanguard S&P Mid-Cap 400 Index Fund - ETF Shares IVOO 921932885 1 Sep 2010
Vanguard S&P 500 Growth Index Fund - ETF Shares VOOG 921932505 1 Sep 2010
Vanguard S&P 500 Value Index Fund - ETF Shares VOOV 921932703 1 Sep 2010
Vanguard Long-Term Bond Index Fund - ETF Shares BLV 921937793 1 Jan 2011
Vanguard Intermediate-Term Bond Index Fund - ETF Shares BIV 921937819 1 Jan 2011
Vanguard Short-Term Bond Index Fund - ETF Shares BSV 921937827 1 Jan 2011
Vanguard Total Bond Market Index Fund - ETF Shares BND 921937835 1 Jan 2011
Vanguard Total International Bond ETF Index Fund BNDX 92203J407 1 Nov 2013
Vanguard 500 Index Fund - ETF Shares VOO 922908363 1 Jan 2011
Vanguard Small-Cap Growth Index Fund - ETF Shares VBK 922908595 1 Jan 2011
Vanguard Mid-Cap Growth Index Fund - ETF Shares VOT 922908538 1 Jan 2011
Vanguard Growth Index Fund - ETF Shares VUG 922908736 1 Jan 2011
Vanguard Small-Cap Value Index Fund - ETF Shares VBR 922908611 1 Jan 2011
Vanguard Mid-Cap Value Index Fund - ETF Shares VOE 922908512 1 Jan 2011
Vanguard Value Index Fund - ETF Shares VTV 922908744 1 Jan 2011
Vanguard Small-Cap Index Fund - ETF Shares VB 922908751 1 Jan 2011
Vanguard Mid-Cap Index Fund Vanguard Mid-Cap ETF VO 922908629 1 Jan 2011
Vanguard Large-Cap Index Fund - ETF Shares VV 922908637 1 Jan 2011
Vanguard Extended Market Index Fund - ETF Shares VXF 922908652 1 Jan 2011
Vanguard Total Stock Market Index Fund - ETF Shares VTI 922908769 1 Jan 2011
Vanguard Global ex-U.S. Real Estate Index Fund - ETF Shares VNQI 922042676 1 Nov 2010
Vanguard FTSE All-World ex-US Small-Cap Index Fund - ETF Shares VSS 922042718 1 Nov 2010
Vanguard Total World Stock Index Fund - ETF Shares VT 922042742 1 Nov 2010
Vanguard FTSE All-World ex-US Index Fund - ETF Shares VEU 922042775 1 Nov 2010
Vanguard Emerging Markets Stock Index Fund - ETF Shares VWO 922042858 1 Nov 2010
Vanguard FTSE Pacific Fund - ETF Shares VPL 922042866 1 Nov 2010
Vanguard FTSE Europe Fund - ETF Shares VGK 922042874 1 Nov 2010
Vanguard Mortgage-Backed Securities Index Fund - ETF Shares VMBS 92206C771 1 Sep 2010
Vanguard Long-Term Corporate Bond Index Fund - ETF Shares VCLT 92206C813 1 Sep 2010
Vanguard Intermediate-Term Corporate Bond Index Fund - ETF Shares VCIT 92206C870 1 Sep 2010
Vanguard Short-Term Corporate Bond Index Fund - ETF Shares VCSH 92206C409 1 Sep 2010
Vanguard Long-Term Treasury Index Fund - ETF Shares VGLT 92206C847 1 Sep 2010
Vanguard Intermediate-Term Treasury Index Fund - ETF Shares VGIT 92206C706 1 Sep 2010
Vanguard Short-Term Treasury Index Fund - ETF Shares VGSH 92206C102 1 Sep 2010
Vanguard Russell 3000 Index Fund - ETF Shares VTHR 92206C599 1 Sep 2010
Vanguard Russell 2000 Growth Index Fund - ETF Shares VTWG 92206C623 1 Sep 2010
Vanguard Russell 2000 Value Index Fund -ETF Shares VTWV 92206C649 1 Sep 2010
Vanguard Russell 2000 Index Fund - ETF Shares VTWO 92206C664 1 Sep 2010
Vanguard Russell 1000 Growth Index Fund - ETF Shares VONG 92206C680 1 Sep 2010
Vanguard Russell 1000 Value Index Fund - ETF Shares VONV 92206C714 1 Sep 2010
Vanguard Russell 1000 Index Fund - ETF Shares VONE 92206C730 1 Sep 2010
Vanguard REIT Index Fund - ETF Shares VNQ 922908553 1 Feb 2011
Vanguard Dividend Appreciation Index Fund - ETF Shares VIG 921908844 1 Feb 2011
Vanguard Total International Stock Index Fund - ETF Shares VXUS 921909768 1 Nov 2010
Vanguard Tax-Managed International Fund Vanguard FTSE Developed Markets ETF VEA 921943858 1 Jan 2011
Vanguard High Dividend Yield Index Fund - ETF Shares VYM 921946406 1 Nov 2010
Vanguard Emerging Markets Government Bond ETF Index Fund VWOB 921946885 1 Nov 2013

Problems caused by FATCA and PRIIPs

After FATCA in 2010, many UK financial institutions and brokerages started refusing accounts for US citizens and US green card holders, even those living in the UK[2]. At the same time, some US brokerages began shutting off access for US citizens and green card holders living outside the US[3].

In 2018, the European PRIIPs (Packaged Retail and Insurance-based Investment Products) regulation became effective. One result is that it is now difficult or even impossible for residents of the EU community to purchase US domiciled funds directly (although indirect purchases potentially remain possible[note 1]). 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.

US citizens and green card holders living in the UK can however use US brokerage accounts, if they have one available to them, to access US domiciled ETFs. Unfortunately however, the combination of these restrictions has made life tricky for US taxable person investors living in the UK, since it has severely limited the options for holding Vanguard US domiciled ETFs with HMRC reporting fund status.

Effects of ETFs gaining or losing HMRC reporting status

Investors should pay close attention to the "HMRC reporting since" column in the table above. HMRC has different tax rules where an ETF or other "offshore" fund is held by an investor outside of any period in which it is an HMRC reporting fund.[4][5]

Notes

  1. Forum member "finrod_2002" provides details of how an investor might use options trades to work around PRIIPs restrictions, in Bogleheads® forum post: Re: European, dutch investor here: Is investing in VTI and VXUS still a good choice?. 17 Feb 2019, viewed 28 Oct 2019.

See also

References

External links