robin1234

Sorry, I'm pretty sure we've covered this question before in one of the 8938 threads. But I'm just trying to get at it again, maybe I've been doing it wrong.

I have a small British final salary pension. I've always reported it in section VI of the 8938. I've always reported the asset value as zero, since there was no specific value in my account. In 2015, I started taking the pension income, which I included in 1040 line 16. Further, I've always checked "no" in Schedule B question 8 ("did you receive a distribution from a foreign trust...")

The pension provider is called "The Pensions Trust." But I don't think it is really a trust, and my account isn't a trust. In the UK the word trust seems to be used loosely. "The Pensions Trust" is a non profit pension provider that manages pensions for non profits (private schools, charities etc.)

In 8938 Pt VI 8b, I'm assuming it's either a "corporation" or a "trust." I'm starting to think I should designate it as a corporation, not a trust. And now that I'm getting income from it, I'm hoping that I don't need to submit form 3520. It's just a final salary pension...

MidAtlantic

I agree with a $0 valuation until 2015, but after that I believe you should be reporting the value of the distributions as the asset value on 8938.

robin1234

Hmm.. I'd have thought that once a payment was made to me, it actually reduced the asset value by that amount?

MidAtlantic

Far too logical! I am going by what the instructions say.

nun

For a pension value estimate I'd probably do an actuarial calculation using a discount rate and an expected payout period.......of course I'm not sure how that works if you live longer than expected?

robin1234

OK, thanks. You've encouraged me to look at the instructions!

robin1234

What about 3520 though? Is a British pension a foreign trust? I just looked through the 3520 form & instructions and there's really no useful clue there.

durham_lad

I've been receiving and paying US taxes through the usual IRS filings (1040) on a UK private pension for 10 years now and have never filed a 3520. The pension is from a previous employer and is managed by Mercer

Maybe the employer, who still has employees paying into the pension fund administered by Mercer, have created a foreign trust by IRS standards and I should have been filing 3520's but the IRS have never corrected me or sent me an audit letter.

theOAP

I agree with this. I believe that was in the old instructions. The new 8938 instructions are much more general.

File 3520 if it makes you feel more secure, but in all honesty, I wouldn't worry about it. How do you answer the "Trust" question in Part III of Schedule B?

For that section of 8938, and that line, there are no correct answers for a 'ring fenced' registered company pension. If you answer 'company' instead of 'trust', there are possible additional forms that could be required for that answer. My pension provider in the UK distributes funds from a ring fenced fund which has ' Acme Widgets Trust' as part of the name.

BTW, do the Teamsters still control their pension fund in the US, or are all pension funds in the US also ring fenced now?

robin1234

Thanks. This is what I'll do to, I won't file a 3520..

I've always checked the box "no" in the trust question in pt III of Schedule B.

Thanks, everyone, for good advice on this question. Next step - my state taxes. Fortunately, NYS is always straightforward once you've done the federal...