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Do UK workplace group personal pensions need to be reported on FBAR?

Do UK workplace group personal pensions need to be reported on FBAR?

Old Mar 20th 2014, 3:59 pm
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Default Do UK workplace group personal pensions need to be reported on FBAR?

Hi all,

I worked in the UK for a couple of years and am now in Canada, but I am a US citizen.

I have a UK group personal pension from work that I have not touched since I moved to Canada from the UK.

I have been filing FBARs for the past two years and only now realized that perhaps the UK pension needs to be reported.

Does it need to be reported? Should I file amended FBARs as well? Do any other US tax forms need to be filed as a result?

Sorry if this has been answered elsewhere--I tried to look but it gets confusing!

Thank you.

covtocan
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Old Mar 20th 2014, 4:43 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by covtocan View Post
Hi all,
I worked in the UK for a couple of years and am now in Canada, but I am a US citizen.
I have a UK group personal pension from work that I have not touched since I moved to Canada from the UK.
I have been filing FBARs for the past two years and only now realized that perhaps the UK pension needs to be reported.
Does it need to be reported? Should I file amended FBARs as well? Do any other US tax forms need to be filed as a result?
If you've already been filing FBars - you're obviously over the threshold reporting requirement. Therefore, I'd assume your UK group personal pension must be included.
I include each of my 3 UK Personal Pensions (however, mine are Individual, not Group Plans).
Unsure if that changes the reporting requirement when you've, not yet, "ever touched it".

Until you start receiving income from them - I don't think there's an IRS reporting requirement. ( )

As for amending FBars - my opinion is:
Yes, theoretically it should be done.
( The Dept. of Treasury - to whom you file them - ask that you to go back 6 yrs., I believe , ie: file a separate FBar form for each of the 6 - with one cover letter explaining the reason for the late reporting. The procedure may be different for amending a previously filed FBar - which is what you'd be doing (IF you do it....and I guess that's your choice)
oh.......After writing the above - I just remembered:
This is the 1st year when everything MUST be done online, using the forms/format they generate. And so what I've written about "cover letter" etc. is not feasible any longer.
Go here: (take the time to read it, and ring them if you still have ?????s)
http://www.fincen.gov/forms/files/FB...structions.pdf
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Old Mar 20th 2014, 4:51 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Yes you do, because it's a foreign trust essentially.

Pretty sure it goes on T1135 as well as a non-resident trust, ask the CRA.
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Old Mar 20th 2014, 4:54 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by covtocan View Post
Hi all,

I worked in the UK for a couple of years and am now in Canada, but I am a US citizen.

I have a UK group personal pension from work that I have not touched since I moved to Canada from the UK.

I have been filing FBARs for the past two years and only now realized that perhaps the UK pension needs to be reported.

Does it need to be reported? Should I file amended FBARs as well? Do any other US tax forms need to be filed as a result?

Sorry if this has been answered elsewhere--I tried to look but it gets confusing!

Thank you.

covtocan
You will find differing opinions on this (of course!) but I include mine on the basis that it is better to declare them, even if it is not required, rather than raise any suspicion about hidden accounts.

On the on-line form there is a checkbox to indicate that it is an amended filing.
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Old Mar 20th 2014, 4:55 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Just having a thread about T1135 here: http://britishexpats.com/forum/showthread.php?t=805377

Yes you do have to report it on that form also.
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Old Mar 20th 2014, 5:10 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

What relevance does that have to the OPs queries?
He's inquiring about reporting requirements for IRS and US Treasury - USA, not Canada -
But, that's not to say that what you rightfully point out isn't also pertinent to his overall tax reporting situation.....gets so confusing doesn't it?
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Old Mar 20th 2014, 5:27 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Thanks to all of you for your replies! I think that this answers my question. And I'm grateful for the information about the CRA form. There's so much more noise surrounding US requirements, particularly for expats, that I hadn't really thought things through for Canada. I will look through that thread now and go stare at the FBAR pages.
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Old Mar 20th 2014, 10:41 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by Steve_ View Post
Yes you do, because it's a foreign trust essentially.
Really?

The general consensus is that individual pension accounts generally are reportable, while an employer based defined benefit foreign pension does not need to be reported on FBAR. FBAR reporting is designed for accounts held with financial institutions.

General consensus that all foreign pensions should be reported on form 8938 (if the individual meets the reporting threshold for 8938), whether individual or employer based. If there is no easily accessible market value, such as with defined benefit plans, it can be shown as zero.

A Canadian RRSP should be reported, with a tax deferral election, on form 8891.

Regarding both FBAR and form 8938, they're simple information reports so if in doubt, it's usually better to report the interest rather than not.

General consensus is also that (despite some scaremongering out there), the IRS does not expect those with foreign pensions to complete foreign trust reporting (forms 3520/3520A) that are designed designed for trusts in the more conventional sense of the term, family trusts etc.
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Old Mar 21st 2014, 3:44 am
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by JAJ View Post
Really?

The general consensus is that individual pension accounts generally are reportable, while an employer based defined benefit foreign pension does not need to be reported on FBAR. FBAR reporting is designed for accounts held with financial institutions.

General consensus that all foreign pensions should be reported on form 8938 (if the individual meets the reporting threshold for 8938), whether individual or employer based. If there is no easily accessible market value, such as with defined benefit plans, it can be shown as zero.

A Canadian RRSP should be reported, with a tax deferral election, on form 8891.

Regarding both FBAR and form 8938, they're simple information reports so if in doubt, it's usually better to report the interest rather than not.

General consensus is also that (despite some scaremongering out there), the IRS does not expect those with foreign pensions to complete foreign trust reporting (forms 3520/3520A) that are designed designed for trusts in the more conventional sense of the term, family trusts etc.
I agree. The employee does not have signature authority over an employer defined benefit pension so no FBAR is required.

Many professionals do insist that foreign pensions be treated as foreign grantor trusts and absent suitable cover from a tax treaty that is probably true. If foreign tax credits are to be used to pay tax on foreign pensions to build up a tax free US basis 3520/3520A is probably required. But for those using the US/UK treaty to defer US taxation some are of the opinion that foreign trust forms are not required.
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Old Mar 21st 2014, 5:39 am
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by nun View Post
Many professionals do insist that foreign pensions be treated as foreign grantor trusts and absent suitable cover from a tax treaty that is probably true. If foreign tax credits are to be used to pay tax on foreign pensions to build up a tax free US basis 3520/3520A is probably required.
Insist? Really?

The forms 3520/3520A not designed for reporting this kind of investment and unlike FBAR/8938/8891, are not simple to complete. And furthermore, there's no indication that a single person has ever been audited for not declaring a foreign pension through 3520/A, let alone penalized. Despite the IRS having form 8938 data for a couple of years now.

It's not the role of any professional to "insist" on this kind of unnecessary over-complication. If this is the case, it's one more reason why it is usually better for someone to simply purchase tax software and self-file U.S. tax returns.

Last edited by JAJ; Mar 21st 2014 at 5:41 am.
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Old Mar 21st 2014, 1:05 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by JAJ View Post
Insist? Really?

The forms 3520/3520A not designed for reporting this kind of investment and unlike FBAR/8938/8891, are not simple to complete. And furthermore, there's no indication that a single person has ever been audited for not declaring a foreign pension through 3520/A, let alone penalized. Despite the IRS having form 8938 data for a couple of years now.

It's not the role of any professional to "insist" on this kind of unnecessary over-complication. If this is the case, it's one more reason why it is usually better for someone to simply purchase tax software and self-file U.S. tax returns.
On tax forums and in articles professionals usually want to treat foreign pensions as foreign grantor trusts. Professionals have a "CYA" mentality because of the liability involved and take the most conservative interpretation of the law. I often think that they also want to pad their bill by doing additional forms and make it seem difficult for their clients to do their own taxes. I've seen it reported that the IRS people at the US Embassy in London describe such an approach as "paranoid".

Last edited by nun; Mar 21st 2014 at 1:43 pm.
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Old Mar 21st 2014, 1:27 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

In my case, it's not a defined benefit pension, it's a defined contribution one. So would there be any debate about whether to report it on FBAR?

By the way (and sorry that this is off-topic), what are the consequences of not deferring tax on a Canadian RRSP on form 8891? I mean, why do they give you the option at all--why would you ever not defer? (I didn't, last year, because I didn't really understand what I was doing and the amount of interest accrued was so small that I didn't have to pay tax on it, I think. But I've never seen anyone discuss this possibility.)
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Old Mar 21st 2014, 1:40 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by covtocan View Post
In my case, it's not a defined benefit pension, it's a defined contribution one. So would there be any debate about whether to report it on FBAR?
No debate at all. It should be reported on FBAR.
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Old Mar 21st 2014, 5:38 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

The first 5 years I lived in the USA the company provided tax preparers who completed FBARs for my UK bank accounts but not for my defined benefit pension plans (2 of them from previous employers). Consequently I have never done FBARs on them, but once I started being paid a monthly sum then I began reporting the payments on a 1099-R like other US pensions.

I have never had signatory authority over my DB pensions, and never known the cash value of them, or taken a lump sum distribution.

Right or wrong, this is what I have done over the years.
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Old Mar 21st 2014, 8:12 pm
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Default Re: Do UK workplace group personal pensions need to be reported on FBAR?

Originally Posted by durham_lad View Post
The first 5 years I lived in the USA the company provided tax preparers who completed FBARs for my UK bank accounts but not for my defined benefit pension plans (2 of them from previous employers). Consequently I have never done FBARs on them, but once I started being paid a monthly sum then I began reporting the payments on a 1099-R like other US pensions.

I have never had signatory authority over my DB pensions, and never known the cash value of them, or taken a lump sum distribution.

Right or wrong, this is what I have done over the years.
Defined BENEFIT I agree, but the OP was asking about defined CONTRIBUTION plans.
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