Britbird1

Hi all, just scared myself silly and am hoping for some guidance.Moved to the US in 2008 with a GC and became a US citizen in 2019. I am 57 years old and prior to leaving the UK had 2 defined benefit schemes with 2 UK employers. Both have a retirement age of 60. I do not know the value of them as they are defined benefit schemes.I did not think that I needed to report them as I was not taking any benefits from them. Do I need to report for FBAR and if I do would I need to backdate reporting.After doing a bit of digging I found out that for one of the schemes at age 60 they estimate my fund value would be 125000 pounds and I guess that my other scheme would be similar as I worked for both companies for similar timeframe with similar benefit structures. Would I need to get a CPA involved? Please help!

lansbury

Take a look at this page as a starting point https://www.greenbacktaxservices.com...t-us-taxation/

It says in part:-

Britbird1

Thanks for your prompt response this makes me feel a little less nervous!

Glasgow Girl

As with all international IRS requirements the need to file untapped pension funds as a foreign account is not clear cut. The general rule is that if you are aware of the underlying fund value because you get a regular statement (usually annual) stating what it is, or because you received a transfer value for whatever reason, or you know the value for any other reason, then you should report it on an FBAR and on Form 8939 with your tax return if you meet the thresholds. Regardless, the safest thing to do with pension funds if you do not know the funds underlying value is to file with a $0 balance.

If you have no unreported foreign income then it is a simple fix. I would back-file the past 6 years FBARs which you can do online fairly easily, simply stating that you were unaware of the requirement to do so up until now. You almost certainly will hear nothing back and you are now compliant. You should also refile the past 3 years tax returns to include Form 8938 if applicable. And, of course file the necessary forms going forward.

If you have any unreported foreign income then it’s a different story altogether and a much more complex situation.

Britbird1

Thank you Glasgow girl for your comments. Much appreciated!

PetrifiedExPat

Hi OP, my username comes from sleepless nights through FBAR and all that jazz. I spoke with several CPA's, and hired one, but all reassured me things were OK. I back filed FBAR's and made my tax record good, and the IRS seemed fine with that (did not hear anything more about it).

My advice, find a trusted CPA, it will help with sleep and nerves!

MidAtlantic

This may make interesting reading: https://www.cpajournal.com/2020/03/0...ation-returns/

I'm not saying I am right, but I do not report my defined benefit pension on my FBAR, mainly on the basis that it is not an account in my name and I have no signature authority in relation to the assets. I do report my SIPP.

On my Form 8938 I report both.

lansbury

I do not report mine either for the same reasons. In fact with mine I'd argue there is no account, I just get my pension paid every month from a communal pot. Form 8938 I stay below the threshold for.

Glasgow Girl

If you are receiving a regular pension payment then there is no need to declare on an FBAR, Form 8938, or anything else because the underlying funds have been relinquished in favor of an annuity or pension. There are no longer funds to report. But until you have relinquished your rights to those funds by taking a pension or annuity you should declare it if you know the underlying value which you would if you receive regular statements (usually annual) or have been informed of a transfer value. That advice is from an ex IRS employee.

Curious why you would not declare it on an FBAR to err on the side of caution. If you have to file one anyway it takes only minutes to add another account and no one ever got penalized for reporting an account they did not need to.

Britbird1

OK , this is my situation. Do I need to disclose on FBAR or form 8938 the following: 2 defined benefit schemes, values unknown from working in UK during 1980s/1990’s. Not taking any benefits from them yet. I have a checking account with First Direct with a balance of around 1000 pounds, kept this open so family members could deposit birthday money. This account has never had more than 1000 in it at any time since I left the UK. My husband has a personal pension plan with Aviva with a transfer value of 1200 pounds. He has not taken any benefits and it’s due to mature in 4 years time when he turns 60. My thoughts are that we are below thresholds for both FBAR and FATCA.

Sibbo

did you do amended returns and if so how far back

Glasgow Girl

Because your combined assets with a known value (including your husbands) are under the threshold of $10,000 and you have not received a statement indicating the value of your defined benefit plans you do not need to file an FBAR or file Form 8938. If you have any doubt declare them on both forms with a value of $0. Completing an FBAR and Form 8938 is not difficult, and is not particularly time consuming especially after you have done it once. When you give up your defined benefit plans in exchange for a pension or annuity you no longer have any funds to consider for FBAR or Form 8938 purposes, although of course you will then have to declare the income.

Glasgow Girl

No idea why you want to submit amended returns but regardless of the reason the IRS will only accept amended returns for the prior 3 tax years. Submit any more than that and they will reject them and return any money sent with those returns.

FBARs on the other hand can be back-filed for up to the 6 prior years. If you have declared all foreign income and paid all tax due to the IRS on that income then that is generally a straightforward exercise with no risk or penalties. If you have undeclared foreign income for those years then there are different programs in place to come into compliance although most of them will involve a penalty of some kind.

Sibbo

Thanks Glasgow Girl
PertrifiedExPat did you use reasonable cause or the streamline domestic process

Britbird1

Thanks Glasgow Girl for your comments. I appreciate your time and knowledge of the subject!