Deadline alert: Interactive Investor has confirmed that all US residents must transfer out their SIPP, ISA, and GIA accounts by an individual specified cut-off date in January 2026. If you do not take action before this deadline, ii will begin to restrict services and could eventually liquidate or force transfers.
Cameron James has both FCA & SEC authorised advisers, qualified and regulated on both sides of the pond, providing a level of knowledge, qualifications, and regulation that few can match, and what is ideal for situations like this. We are also waiving our initial advice fees on ISA’s and GIA’s for those caught up in this situation.
If you’re a US citizen, Green Card holder, or otherwise a US tax resident with Interactive Investor, this change will affect you personally, regardless of the assets you hold inside your SIPPs, ISAs, or GIAs. In this article, we explain:
- Why Interactive Investor is exiting the US resident market
- What the transfer requirement means for your accounts
- PFIC tax traps: including why certain assets inside ISAs/GIAs can trigger potential punitive US tax consequences
- Transfer strategies and compliant alternatives for each account type
⚠️ Why Interactive Investor Is Requiring Transfers (US Exit)
Interactive Investor has stated that it is withdrawing services for US residents due to the complex regulatory, reporting, and tax obligations associated with servicing US tax residents. Platforms like ii are generally UK-regulated only, and meeting ongoing US reporting and compliance burdens is no longer commercially viable for a relatively small number of clients.
The ii notification informs affected customers that they must:
- Transfer assets to another provider
- Withdraw assets to your own custody (e.g., CREST certificates)
- Sell holdings and withdraw cash
- Use charity options for small/valueless holdings
If no action is taken before your letter’s deadline, ii may restrict or close access to services and sell or transfer holdings on your behalf.
Key dates: ii sends letters, you typically have ~ 60 days to act, and the effective closure/restriction date is in January 2026.
This announcement is rather surprising, not because of the content, but rather that they still allowed US residents on their platform in the first place. As their own info page alludes to, there are very few platforms that support US Residents, as they already noted the concerns ii have raised here and restricted access to US Residents many years ago.
🧾 What This Means for Your SIPPs, ISAs & GIAs
1️⃣ SIPP (Self-Invested Personal Pension)
Your ii SIPP must be moved to another pension provider. Unlike a UK resident transfer scenario, few UK platforms accept US resident SIPP holders due to regulatory barriers; this often means looking at US-compliant platforms, UK international SIPPs with cross-border capability, or bespoke solutions.
⚠️ If you take no action, ii will restrict functionality, you may not be able to contribute, buy new assets, or transfer in. Though you will likely still be able to sell or exit existing holdings. However, other providers have sold down holdings, so that future risk is also there.
As we have noted before with the Interactive Investor SIPP, there are also limitations that apply to all non-UK Residents full stop, so this announcement has actually likely done you, and your loved ones especially, a big favour, as now you can move to a much more suitable provider that you probably should have moved to many years ago.
Path Forward
Move to a SIPP provider that provides full compliance for US Residents. That requires a platform that has an SEC authorised financial adviser, like those at Cameron James USA, managing/advising on the investments. The SIPP remains fully FCA Regulated, but the investment advice and platform becomes US SEC compliant, as the advice is provided under SEC authorisations.
There are zero compliant “self-invest” options for US Residents, and most other well regulated jurisdictions, for that matter, that we know of.
2️⃣ ISA (Stocks & Shares ISA)
Unlike a pension, an ISA does notenjoy PFIC relief or US tax favours. In the US tax system, most UK-domiciled funds (OEICs, unit trusts, investment trusts) and many ETFs count as Passive Foreign Investment Companies (PFICs), even when held inside an ISA.
PFICs trigger harsh reporting requirements and punitive tax rules:
- Annual filing of IRS Form 8621 for each PFIC you hold.
- Potential taxation on unrealized gains at the highest ordinary income tax rate.
- Retroactive tax interest and penalties if not properly reported
Crucially: The ISA wrapper does not stop US tax obligations. Many investors assume that because the ISA is tax-free in the UK, it’s safe — it’s not safe for US tax purposes if PFICs are present, and is subject to standard US tax treatment if held by a US taxpayer. That means capital gains rules apply (short term and/or long term), tax on income and dividends etc.
Path Forward
There is one key consideration to make here, whether to keep it in an ISA wrapper or not. If there is any chance that a return to the UK is on the cards, and especially if the ISA is sizeable, then you do not want to give up the potential future tax benefits you would have from having the assets inside an ISA as a future UK tax resident.
If a move back is a potential option, then keeping it in an ISA wrapper is a prudent move. There are very few ISA providers that will accept a US Resident, but we work with them, and by providing SEC regulated oversight, the platform, and the ISA wrapper become fully SEC compliant.
If you have no plans to move back to the UK, then paying the additional costs involved with keeping it inside an ISA wrapper are likely not justified, especially if a smaller account. In this situation, liquidating the investments and reinvesting into US based accounts is likely the more suitable option, and we can run you through the various options.
Regardless of the choice, in order to remove any PFIC issues, USA domiciled Funds & ETFs are used to build the portfolio.
3️⃣ GIA (General Investment Account / Trading Account)
GIAs are fully taxable portfolios for US tax residents. PFIC rules apply without exception to foreign funds held in a GIA. Even direct shares of non-US companies can cause PFIC classification if they are investment companies.
Holding PFICs inside a GIA means:
- Annual reporting to the IRS
- Complex tax elections (default, mark-to-market, QEF; but QEF statements often unavailable)
- Potential double-taxation and paperwork burden
Path Forward
For those with a General Investment Account, the options are less nuanced. There are no tax advantages in either the UK or the US, so the key consideration is to review and deal with any PFIC issues, and then decide how you want to invest the assets.
If you have PFIC holdings, then you will need to sell them anyway, but if you don’t, then you can, in theory, look to transfer them as is, what is known as an “in-specie” transfer. This effectively means the ownership is re-registered from the ii GIA to a new GIA.
If you have holdings that you wish to keep and aren’t US based, and/or you would like to keep the investments outside the US, then a non-US based platform that works with US Residents, like what you can use for your ISA and SIPP, is a good option.
If you have PFIC holdings and need to sell down to cash anyway, then it is likely that reinvesting the funds in a US based platform is the better and more cost-effective solution.
Again, our advisers can discuss his all with you and advise on the most suitable solution.
📌 PFIC: The Hidden US Tax Trap Inside UK Accounts
Even if you are only transferring, you must understand PFIC rules:
✔️ What Is a PFIC?
Under US tax law, a PFIC is any foreign corporation that primarily earns passive income or holds predominantly passive assets. Most non-US mutual funds, unit trusts, OEICs, and many ETFs fit this definition.
✔️ Why PFICs Matter to US Residents
For US tax residents, owning PFICs may result in:
- Taxation on unrealised gains at top ordinary rates
- Annual IRS Form 8621 filings for each PFIC
- Interest charges and penalties for deferred income
- PFIC status even if the investment is held inside a tax-favoured UK wrapper, like an ISA, for UK tax purposes
✔️ Examples That May Be PFICs in ISAs/GIAs
- UK and European OEIC / unit trust funds
- Investment trusts (often UK-listed but PFIC-classified)
- Many non-US ETFs, such as those domiciled in the UK or Ireland, like Vanguard and iShares index ETFs
- Some collective funds marketed in the UK
🛠 The ii Asset Transfer Options
Option 1: Transfer to a PFIC-Compliant Platform
The ideal path for many US residents is a platform that supports:
- US-domiciled ETFs or mutual funds with proper IRS reporting (e.g., 1099s)
- Integration with US tax reporting tools
- Advice from FCA + SEC dual-regulated advisers. SEC advice is all but mandatory, but FCA is a nice-added benefit and potential comfort.
This reduces ongoing PFIC exposure and simplifies compliance.
Option 2: In-Specie Transfer of Direct Shares (Non-PFIC)
If you hold direct shares of non-PFIC entities (e.g., certain UK listed companies that are not PFICs) or US shares, you can often re-register these in-specie to a new broker.
Note: Not all holdings can be transferred in-specie; some funds and ETFs may not be eligible, it will depend on both ii and the new platform.
Option 3: Certificates / Paper Withdrawal
You may withdraw certain CREST holdings into your own custody. However:
- Paper certificates complicate future trading
- You still may need a US-compliant broker to reinvest
- They do not eliminate PFIC tax obligations
This is very cumbersome, does not provide any benefits over the other options, so can largely be ignored.
Option 4: Sell Then Reinvest
ii allows you to sell holdings and withdraw cash (including different currencies) to your bank. You can then reinvest via a US-compliant platform.
Worst case: ii forced sales if you do not act. This can trigger:
- Unplanned capital gains
- Loss of control over timing & FX rates
- Additional UK and US tax reporting criteria
Loss of future ISA tax benefits
📅 Action Steps Before the end of January 2026
- Review your ii holdings now (SIPP, ISA, GIA).
- Identify PFIC exposure: Non-US funds, trusts, ETFs.
- Contact a US SEC Authorised Financial Adviser who specialises in UK Expats.
- Plan tax elections/filings with a US-qualified CPA if PFICs have been held historically.
- Avoid last-minute liquidation: forced sales cost tax and opportunity.
Obtain advice on best bath forward for your ii accounts from a US SEC authorised financial advisor — A UK FCA adviser, especially if they marketed to you, is not going to be able to give you compliant and insured advice, nor are they likely to have all the market options available to you.
📌 Conclusion: Don’t Wait Until It’s Too Late
The Interactive Investor US residency exit mandate affects every US tax resident with SIPPs, ISAs, or GIAs — regardless of holdings. Ignoring PFIC implications can trigger years of costly IRS filings and punitive taxation.
Start your transfer or transition plan now so you retain control, avoid forced sales, and move into a compliant investment structure that suits your cross-border tax obligations.
What Differentiates Cameron James USA?
Those reading this our likely here with a very “transactional” mindset, as you just want help, at least initially, with solving your problem, namely, finding a new home for your Interactive Investor SIPP/ISA/GIA.
However, what has become rather apparent with those we have spoken to in this situation thus far, as it more often than not is with UK Expats in general, there is so much more that you can be doing with your cross border financial planning, and that is where we differentiate ourselves from most of our competitors.
Yes, we are UK pension and asset experts, and all of our advisers are FCA regulated and give advice to UK residents, but we pride ourselves on being “full-fat” financial planners, who focus on the holistic side of financial planning.
We have a focus on cash flow modelling, looking at all of your assets, income sources, state pensions, social security, taxes etc, and help you build a goals based financial plan.
If you have found yourself caught up in this situation, then there is a very good chance that there are myriad other booby traps you do not know about, which we can help you discover and plan around.
US financial planning itself is complex, and that is why so many people utilise a financial adviser on an ongoing basis (estimates are that c.75% of those with at least $1m in investable assets employ a financial adviser), and then adding UK assets to that just adds a whole other layer of complexity, which requires careful planning and structuring.
We will of course focus on helping you with your immediate issue, Interactive Investor transfers, but as our relationship matures, you will see more and more of the value of our holistic approach and our extensive knowledge and experience with cross border US/UK planning, which is why our client retention rate is so high and our reviews and feedback so positive, as the value we add beyond what clients first expect is so great.
Your next decision is important. Make it with the right information and the right adviser.
👉 Book a call with our team today
💡 FAQ
Q: Are direct equities PFIC-free?
A: Very likely, yes — direct shares of operating companies that don’t primarily hold passive assets are usually not PFICs, but verify with a tax specialist.
Q: Does an ISA protect me from US tax?
A: No. UK ISA UK tax protections have no bearing on US PFIC rules.
Q: What happens if I do nothing?
A: ii may restrict access, sell, or transfer holdings at their discretion. If you have PFIC’s, then delays will likely lead to even greater tax issues.
Q: Can I do this myself, with no financial adviser?
A: If you want to remain inside a SIPP or ISA wrapper, then no, the only way, we know of, to remain fully compliant is to work with an SEC Authorised Adviser.
Disclaimer
This communication is intended for or directed to U.S.-connected persons. This communication should not be re-distributed or re-published without consent from Cameron James. Some of the content in this communication was provided by third parties of Cameron James. We have not independently verified every detail but believe the information to be reliable. None of this content should be construed as investment, legal, accounting, or tax advice.
Tax laws are complex and vary by individual. You should always seek advice from a qualified tax professional regarding your specific circumstances.
