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I bet there's a book on this... What do I do with my ISAs and Pensions

I bet there's a book on this... What do I do with my ISAs and Pensions

Old Jul 14th 2013, 6:28 pm
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Default I bet there's a book on this... What do I do with my ISAs and Pensions

I have a few ISAs and a couple of pensions.

Rather than post a shed load of questions, is there a book that covers the legalities and tax implications of all this, e.g. I intend to keep my ISAs and not cash them in - How do the Inland Revenue and the IRS view this, or... I have a couple of paid up pensions and a frozen company pension - don't want to move them but leave them in the UK and derive an income when I retire in £s; Again whats the tax/legal position on both sides of the Atlantic as when I retire I won't be a UK resident.

I can see this all getting mmassivelyinvolved with tax returns etc. Any recommendations/publications greatly appreciated.
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Old Jul 14th 2013, 7:00 pm
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Your pensions are fine, and have no tax consequences in the US, other than filing a FATCA form. Your ISAs will be taxed by the IRS because the tax exempt status is not recognised, so you will pay US taxes on them, but you'll have no British tax credit to set against the US taxes.

And BTW, I don't believe there is a book because it would have to be rewritten at least twice a year to reflect changes made in the US and UK taxes. There are invariably a few tweaks made by each country at least once a year.

Last edited by Pulaski; Jul 14th 2013 at 7:04 pm.
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Old Jul 14th 2013, 7:13 pm
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

ISAs are tricky and the best course of action may depend on if they are cash or shares. My understanding is that the reporting requirements for shares isas are much more complicated. You can generally keep them but cannot add to them. Some institutions will insist you close your account if they know you are a US resident because they do not want to deal with the issue. Check the t&c.
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Old Jul 14th 2013, 7:16 pm
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Thanks - Do you mean the ISAs are taxed when I cash them in I presume.

At the moment they are static and are shares based, I am not contributing to them. I guess I could always cash them in when I want them; the proceeds going into my UK bank account and er, forget, er, about them, er, IRSwise.
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Old Jul 14th 2013, 7:43 pm
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Originally Posted by freerskier View Post
Thanks - Do you mean the ISAs are taxed when I cash them in I presume.

At the moment they are static and are shares based, I am not contributing to them. I guess I could always cash them in when I want them; the proceeds going into my UK bank account and er, forget, er, about them, er, IRSwise.
No, I meant any income (interest or dividends) will be taxed by the IRS. If you become US domiciled for tax purposes, you will, I think, be charged capital gains too. Personally I would liquidate them before you become assessable to US taxes. Pension a/cs are different and won't cause you the same problems.
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Old Jul 14th 2013, 8:01 pm
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

I had (and still have) some stock/shares/funds in ISAs.

I was told by the institution when you leave the UK you may continue to hold but make no further contributions.

I intend to just sit on them until needed.

Whatever action you take the accounts have to be reported annually on a TD F 90-22.1 to the IRS

http://www.treasury.gov/services/Pag...-Accounts.aspx

V
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Old Jul 14th 2013, 8:40 pm
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Cool Re: I bet there's a book on this... What do I do with my ISAs and Pensions

thanks - get what you mean.

And the - if I just kinda left them rolling along and dind't get to, er, tell anyone approach...?
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Old Jul 14th 2013, 9:33 pm
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Originally Posted by freerskier View Post
thanks - get what you mean.

And the - if I just kinda left them rolling along and dind't get to, er, tell anyone approach...?
Well you'd be gambling on there not being a data sharing deal with the IRS and your bank/ broker, so aside from the outright dishonesty, I wouldn't bet much on it not either coming to light, or you feeling pressured to bail and 'fess up.
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Old Jul 14th 2013, 11:56 pm
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Originally Posted by Pulaski View Post
Well you'd be gambling on there not being a data sharing deal with the IRS and your bank/ broker, so aside from the outright dishonesty, I wouldn't bet much on it not either coming to light, or you feeling pressured to bail and 'fess up.
While I am not sure exactly what might happen in this specific case, the OP should be aware that the penalties in the US for failing to report income that should have been reported can be pretty severe.
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Old Jul 15th 2013, 12:08 am
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Hi all my helpers out there - found this link which has some of the text from the tax conventions between us/uk :

http://money.stackexchange.com/quest...-tax-on-my-isa
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Old Jul 15th 2013, 12:09 am
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Also - I will have over $30,000 to transfer in straight cash to my us bank account. Are there rules around this as well?
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Old Jul 15th 2013, 12:11 am
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Yeah this looks good - sensible stuff. Thanks for the tip.
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Old Jul 15th 2013, 12:56 am
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Originally Posted by freerskier View Post
Also - I will have over $30,000 to transfer in straight cash to my us bank account. Are there rules around this as well?
Yes, just transfer it. There are no taxes, no governmental fees, duties, or levies, and for you* no reporting, requirements. If you leave it in the UK, or elsewhere offshore, you will have to report the account under FATCA.

* The receiving bank is required to report wires for more than $10,000. DO NOT even think about trying to break your transfer into lesser amounts, the consequences are much worse that just accepting the required reporting, which is entirely inconsequential to the law-abiding tax payer.

Last edited by Pulaski; Jul 15th 2013 at 1:14 am.
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Old Jul 15th 2013, 3:34 am
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Originally Posted by Pulaski View Post
* The receiving bank is required to report wires for more than $10,000. DO NOT even think about trying to break your transfer into lesser amounts, the consequences are much worse that just accepting the required reporting, which is entirely inconsequential to the law-abiding tax payer.
Depending on how you do it your bank might cap your daily transfer. If you do it in person via the bank I believe you can do a large amount but if you do it online via the bank then you may be capped. I know I was with HSBC, $10,000 or £10,000, one of the two, can't remember which though.
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Old Jul 15th 2013, 4:42 am
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Default Re: I bet there's a book on this... What do I do with my ISAs and Pensions

Originally Posted by freerskier View Post
thanks - get what you mean.

And the - if I just kinda left them rolling along and dind't get to, er, tell anyone approach...?
Please do not ask our members to condone deception to the IRS.
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