Should US Expats in the UK Keep Their US Brokerage Accounts?

It is an unwelcome letter at an inconvenient time. You move to London, update your address, and your US brokerage informs you that it can no longer hold your account now that you live abroad. The instinct is to comply quickly - close it, move the money, be done. For a US person, that instinct can be expensive, because the US account you are being nudged out of is often the best home your investments have.

This article is for US citizens living in London and across the UK who hold US brokerage and investment accounts and are deciding whether to keep, move, or close them.

Why a US account often suits a US person best

The case for keeping a US brokerage account, where you can, rests on several real advantages. It gives you access to US-domiciled funds and ETFs, which are not PFICs, so you avoid the punitive regime that catches ordinary UK funds. The tax treatment is the familiar US treatment your return is already built around. The account sits under US regulatory and investor-protection frameworks. And it keeps a natural home for dollar-denominated assets, which many cross-border households want to retain. For a US person, these are not minor conveniences; they go to the heart of investing cleanly across two systems.

Why brokerages restrict non-resident accounts

None of this means your existing provider will keep you. Many US brokerages restrict or close accounts once a client has a non-US address, for reasons that have little to do with you personally: cross-border licensing and regulatory limits, the compliance cost of serving clients abroad, and a general industry caution driven by information-sharing rules. 'We can no longer service your account' usually means the firm has decided the regulatory overhead is not worth it - not that holding US investments from the UK is itself improper.

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What 'restricted' actually means

Restriction comes in degrees. Some providers freeze new purchases while letting you hold and sell existing positions; some limit which funds you can buy; some ask you to move the account within a deadline. Understanding exactly what your provider is and is not allowing is the first step, because the right response to a purchase freeze is different from the right response to a closure notice.

Options when your account is restricted

If your current brokerage will not keep you, the goal is usually to preserve the advantages above rather than abandon them. A number of custodians and advisory firms specialise in serving US persons who live abroad, and can hold US-domiciled investments for a client with a UK address. Moving to such an arrangement keeps you inside the PFIC-free, US-regulated world rather than pushing you into UK retail funds. The point is that a closure letter from one provider is not the same as having no US options.

The risk of closing and reinvesting locally

The most damaging response to a restriction is often the most natural one: close the US account, bring the money into a UK platform, and buy familiar UK funds. For a US person, that typically means selling a clean portfolio, possibly realising gains, and reinvesting into PFICs that are taxed punitively and carry annual Form 8621 filings. A step taken to simplify can quietly create the exact problem the rest of this series is about avoiding. Industry commentary on why US expats keep their US accounts - such as well-known summaries of the tax, currency, and regulatory reasons - is a useful background read, but the decision is an individual one.

An illustrative example

Consider a hypothetical US citizen, age 50,who moves to London and receives a notice that his US brokerage will restrict his account in 60 days. Tempted to liquidate and reinvest through a UK app, he first checks the detail: the firm will let him hold but not add to existing positions. Exploring cross-border custodians, he finds one that will take the account intact, preserving his US-domiciled funds and avoiding a PFIC-laden reinvestment. The closure letter turned out to be the start of a decision, not the end of one. This example is hypothetical and for illustration only.