megansam

Good Morning.
Does anyone have any experience of transferring their 401K and IRA into the UK? Can anyone suggest any UK based financial advisors who may be able to help with this? We believe there are ways to do this via equivalent qualifying schemes/plans but badly need help to get it done. Thanks for any pointers.

BTW, two old people now back in the UK since March 2020 after 26 years in USA. Lots of adjustments but loving it despite Covid!

durham_lad

I haven’t heard of a way to transfer the funds to UK equivalent funds. We transferred our 401ks to IRAs and left them in the USA where we withdraw as required. The brokerage holding our IRAs even allows UK phone numbers for verification codes when logging on to manage the holdings and make withdrawals. We kept a US bank, linked to the accounts, and do the transfers to there as usual, then we move money to the UK from our US bank.

megansam

Thank you so much for responding Durham Lad. We currently have the arrangement you describe but would like to bring the funds back to the UK and less subject to the vagaries of exchange rates and the challenges of funds transfer from USA banks. Will report back here if we manage to find a solution.

durham_lad

Please do let us know if you find a good solution. For sure my son would like this option.

kfbell

Have a look at Wise (or Transferwise as was). I've used them to transfer funds from the US back to the UK. You first wire the money to the US branch of Wise. Then transfer it to a $ account in the UK, from where it can be sent to your UK bank. Very fast transit across the Atlantic and almost as fast within the UK. Exchange rates are good and fees are pretty low I thought.

SanDiegogirl

...

.... but doesn't the method above mean you will have cashed in your 401K thereby invoking tax liabilities and also penalties for early withdrawal penalty?

kfbell

Ahh sorry, misunderstood the question - I was talking about the mechanics of transferring money. On the taxation, I paid a London based US/UK tax accountant for some expensive advice about my own IRA which is still in the US. He advised that you can’t avoid tax on withdrawal as there is no UK pension vehicle that can take the money. So, you can either pay UK tax by withdrawing your monies in stages or US tax if you withdraw it all at once.

durham_lad

…or lump sum conversion to a Roth IRA and pay only US tax, then in future years you are free to withdraw from it tax free in both countries.