sir_eccles

Re-read post #9

Pulaski

And #12.

colin_w

I read somewhere that there was a tax treaty that allowed it, but I could be wrong.

Hotscot

Nope. Not allowed.
You may hear of something called QROPS but it's a dead-end.

colin_w

Now I'm really confused. Are you saying:

1. US banks will/won't convert sterling received to USD?
2. UK payers are/aren't willing to convert sterling to USD at source?
3. It's not possible to transfer money from the UK to the US?

colin_w

Yes, thanks. I think that's related to the thing I read. Just curious, why is it a dead end?

colin_w

...Thanks... I see it now... I did some more Googling on QROPS and found this at http://www.ukpensiontransfer.com/faq:

"Can I import my UK frozen pension fund to USA and add it to an IRA or 401K ?"
"No. The United States IRS will not permit it. UK Pensions can only be transferred to a US pension where the UK pension plan meets the pension rules of the IRS tax code. No UK pension plan seeks to meet the US requirements. The benefits and terms of UK pensions are considered to be over-generous by the US tax authorities. This import restriction even applies when the receiving scheme is an HMRC-approved Qualifying Recognized Overseas Pension Schemes (QROPS) already established in USA."

Pulaski

It's quite simple:

1. If the US bank receives a GBP wire (or cheque, or cash) they must convert it to USD because you CAN'T HAVE a GBP a/c at a US bank in the US
2. UK payers have a choice. (Who knows if they're "willing"? ) They can send GBP, and the US bank will convert it (see 1, above), they can have their British bank convert it, and send USD, or they can use an on-line remitting service and have GBP debited from their a/c in the UK and USD credited to their a/c in the US. This third option is usually the best as you typically get a significantly better exchange rate than the banks in either country offer, and can avoid the wire fees typically charged at both ends.
3. I'm going to presume you're just taking the p!$$ with that one!

To reiterate what I said earlier: you cannot have a GBP a/c with a US bank in the US, which means exactly what it says, nothing more, nothing less!

However per #9 above this is all moot because your pension will be paid in USD into your US bank a/c.

quiltman

So far as i'm aware, your UK STATE pension can be paid by the UK International Pensions Dept direct into ANY foreign bank account and the conversion is done BEFORE the money is transmitted. Many UK Expats here have their pension paid direct into a Philippines account in pesos.It is done by Citibank in the UK on behalf of the pensions dept. I'm not sure about your Civil service pension though I presume there is no reason the UK government would not pay it directly to your US account in dollars.

your Civil Service pension is classed as a Government Pension and you need to check the double taxation agreement between UK and USA because in nearly all cases these pensions CANNOT be paid gross. They are excluded from the agreement and any tax due is deducted at source by HMRC including any tax due on your state pension if your income is over the tax free limit. By law the UK government are not allowed to take tax due off STATE pensions but can take it off GOVERNMENT or PRIVATE pensions.
foe example, my wife has a Teachers pension and a State pension. The tax due on her TOTAL income is deducted from her teachers pension but she cannot claim it gross and elect to pay tax here as BOTH pensions are specifically excluded from the double taxation agreement between UK and Philippines.

Heres some info; http://www.hmrc.gov.uk/taxtreaties/dtdigest.pdf

The US is not one of the few countries you can get government pensions paid gross. However, Canada is!

quiltman

Whoops1 just looked through the document and it looks like you CAN get your pensions gross if you are both a Citizen AND resident in the US. (Right at end of document)

Sorry!

colin_w

Thanks! I re-read the whole thread and now it's clear. (My confusion was caused because I wrote "deposit GBP" when I thought I had written (or meant to write) "deposit the value of GBP (in dollars)" Apologies.

colin_w

Thanks! In my case I'm "a national and a resident of the territory" ('N & R' in the table notation) so it looks like the relief is available if the forms discussed above are completed. Yeah!

Pulaski

You're welcome. I'm glad we've got that cleared up.

nun

The tax treaty allows for the US and UK reciprocal tax deferral of certain retirement accounts, however, the funding of those accounts is entirely governed by domestic laws and so the source of any roll over funds would also have to comply with those domestic laws and a foreign pension fund will simply not comply because it is organized under non-US legislation.

colin_w

BTW, anyone had any interaction with this outfit:

UK Pension Transfer LLC for Frozen UK Pensions and British Pension Transfers UK

??? It came up in a Google search for QROPS (Qualifying Recognised Overseas Pension Scheme http://en.wikipedia.org/wiki/Qualifying_Recognised_Overseas_Pension_Scheme )