The UK side: your ISA survives but is frozen
Nothing forces you to close an ISA when you leave. GOV.UK confirms you can keep the account open and you still get UK tax relief on the money and investments held in it. What stops is new money: once you move abroad and become a non-UK resident you cannot pay in, unless you are a Crown employee working overseas or their spouse or civil partner. You must tell your provider as soon as you stop being UK resident, and you can still transfer the ISA to another provider while abroad. Our leaving the UK tax guide covers the wider departure checklist.
The US side: the IRS ignores the wrapper
The ISA's tax-free status only binds HMRC. Once you are a US tax resident, the IRS taxes you on your worldwide income, so the interest, dividends and gains inside the ISA are reportable and taxable on your US return, exactly as if you held the investments directly. The treaty rarely rescues the position, because there is no UK tax on the income for a treaty to relieve. Stocks and shares ISAs can be worse still: UK pooled funds such as OEICs, unit trusts and many ETFs are typically treated as passive foreign investment companies (PFICs), a punitive US regime with a separate Form 8621 filing for each holding. Our guide to FBAR and FATCA explains the wider US reporting layer.
Decisions to make before you fly
The practical choices are best made before you become a US resident: whether to keep, transfer or encash each account, and what the ISA actually holds. We handle the UK side as Chartered Tax Advisers; the US filings themselves are handled by our US partners (Enrolled Agents and CPAs), whom we coordinate for you. None of this is investment advice: it is about understanding the tax treatment of what you already hold on both sides of the Atlantic.