nun

Ah TSP.....excellent. Leave it there, that's a great plan. As it's a government pension it is taxed slightly differently from a regular 401k. As it is a US government pension and you will be a UK citizen living in the UK it will be taxed in both the US and the UK. You pay the US income tax first and than take a foreign tax credit on your UK taxes.

nun

The following only applies to money held outside of official retirement and pension accounts.

The IRS and HMRC have rules about owning offshore mutual funds and they will tax them at higher than normal rates if they don't conform to their rules. For the IRS this means that it's very bad to own non US mutual funds as they are taxed as Passive Foreign Investment Company (PFIC) and for HMRC it's bad to own what are known as non-reporting funds. US Vanguard ETFs are both US funds and also HMRC reporting funds so both the IRS and HMRC will be happy and more importantly so will you.

willielad

Nun, Thanks, you have to do everything online with Vanguard, not my strength, while i could set it all up in person with Fidelity and use ETF'S with them aswell as long as i set it up before leaving.As far as you know, will the Fidelity ETF'S work just aswell?

Jensmate

Thank you. Good to know!

nun

If you buy US Vanguard ETFs through Fidelity you will be ok. US Fidelity ETFs won't work on the UK side because they are not HMRC reporting funds.......as far as I know.

Jensmate

Another question regarding banking. I have noticed both HSBC and Santander branches here in the U.S. Are either of them truly intenational where a single account functions equally in both countries ?
I'm trying to keep my move planing as financially simple as possible. One account, one source for my 401k, govt pension and Social Sec to be deposited and withdrawn equals happiness come tax time.
Speaking of tax time, I last worked in the UK in 1974 thru 1977 earning a pittance as a Civil Servant....I don't remember ever filing a UK tax return. When are they done? Might I receive a few groats UK pension. I'm not hopeful .....

willielad

Thanks again

durham_lad

This is exactly how we feel and we moved back last May after 29 years away. We retired in 2010 and have pensions, brokerage accounts and IRAs (we rolled our 401ks to IRAs). Advice on taxes from folks like nun has been invaluable.

durham_lad

We opened an HSBC account in the USA before returning as we already had an HSBC account in England. It does require you to have 2 accounts, one in each country, but from either account you can see the balances of all your accounts in UK and US. However, to see transaction level detail or to move money, pay bills etc, you have to be logged onto the country site you want to do the transactions on.

Moving money between the accounts US<>UK is extremely easy and very fast, the money moves within a couple of hours. However it is more expensive than Transferwise for smaller amounts so I use Transferwise more often, such as transferring my pensions, dividends etc. For very large sums (>$100,000) then the rates are much closer so in buying a house this last week I used the HSBC global transfer. (In fact I used the large sum transfer 3 times over this last couple of months when exchange rates looked good).

To move the house money on exchange of contracts in the U.K. was also easy to accomplish from the USA and it felt very secure as the gentleman on the other end of the phone was very thorough in his security questions. This was done from the USA about 3 days before completion because we were back there winding up our affairs, shipping furniture etc, when the house purchase actually went through. We arrived home last Wednesday and walked down to the agent, picked up the keys to the new house and walked over there. It felt really great to be fully home. (We've had a rental house since we moved back in May so not quite as frantic as it may have been - fingers crossed that the freight makes it okay in a few weeks time)

TiaMaria57

Really good advice and thank you posting just how you accomplished it. We're planning to do the same this year.....sell the US house, get a US rental, go back to the UK in between to find a house to buy and return to the US to organize the shipping of HHG. I hope everything works out well for you.

durham_lad

...and I wish you all the best on your plans to return.

TiaMaria57

Thank you for your good wishes Durham_lad. However it's not as easy at our age as it was when we first came over 23 years ago. I'm sure you feel the way same too!

durham_lad

Got to admit that it was easier going over in our 30's than coming back in our 60's, but we are now still feeling extremely euphoric being back, even though we have loads to do moving into a new house with all that entails.

TiaMaria57

So glad you're enjoying your new life. Have fun and just take it easy.