IRS 8833, UK SIPP - which IRC specifically?
Jan 30th 2013, 5:34 pm
#1
Forum Regular
Thread Starter
Joined: Aug 2001
Location: Bletchley, UK
Posts: 216
IRS 8833, UK SIPP - which IRC specifically?
Sorry, another tax filing question!
I believe I've gotten my head around the filing requirements for my UK SIPP for me, a dual UK/US citizen.
As far as I can see, since I received no income or distribution from this SIPP, but it did do well and realized some Capital Gains, I only need to file the FBAR/FATCA (Yes it's enough for both of those) and then file the 8833 to invoke article 18 of the tax treaty on the gains.
But where I'm drawing a blank is what to put in the 8833 box "List the Internal Revenue Code provision(s) overruled or modified by the treaty-based position" and also is there anything to put in box 4 on this same form - "List the provision of the limitation on benefits article in the treaty that the taxpayer relies on to prevent application of this article".
Phew, I consider my command of English to be pretty good, who the hell writes this stuff???
I believe I've gotten my head around the filing requirements for my UK SIPP for me, a dual UK/US citizen.
As far as I can see, since I received no income or distribution from this SIPP, but it did do well and realized some Capital Gains, I only need to file the FBAR/FATCA (Yes it's enough for both of those) and then file the 8833 to invoke article 18 of the tax treaty on the gains.
But where I'm drawing a blank is what to put in the 8833 box "List the Internal Revenue Code provision(s) overruled or modified by the treaty-based position" and also is there anything to put in box 4 on this same form - "List the provision of the limitation on benefits article in the treaty that the taxpayer relies on to prevent application of this article".
Phew, I consider my command of English to be pretty good, who the hell writes this stuff???
Jan 30th 2013, 6:42 pm
#2
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: IRS 8833, UK SIPP - which IRC specifically?
Sorry, another tax filing question!
I believe I've gotten my head around the filing requirements for my UK SIPP for me, a dual UK/US citizen.
As far as I can see, since I received no income or distribution from this SIPP, but it did do well and realized some Capital Gains, I only need to file the FBAR/FATCA (Yes it's enough for both of those) and then file the 8833 to invoke article 18 of the tax treaty on the gains.
But where I'm drawing a blank is what to put in the 8833 box "List the Internal Revenue Code provision(s) overruled or modified by the treaty-based position" and also is there anything to put in box 4 on this same form - "List the provision of the limitation on benefits article in the treaty that the taxpayer relies on to prevent application of this article".
Phew, I consider my command of English to be pretty good, who the hell writes this stuff???
I believe I've gotten my head around the filing requirements for my UK SIPP for me, a dual UK/US citizen.
As far as I can see, since I received no income or distribution from this SIPP, but it did do well and realized some Capital Gains, I only need to file the FBAR/FATCA (Yes it's enough for both of those) and then file the 8833 to invoke article 18 of the tax treaty on the gains.
But where I'm drawing a blank is what to put in the 8833 box "List the Internal Revenue Code provision(s) overruled or modified by the treaty-based position" and also is there anything to put in box 4 on this same form - "List the provision of the limitation on benefits article in the treaty that the taxpayer relies on to prevent application of this article".
Phew, I consider my command of English to be pretty good, who the hell writes this stuff???
If you've solved the SIPP issue I applaud you, it's a constant area of "interpretation" depending on the ratio of employer to employee contributions and PFIC/foreign trust vs treaty exclusion.
Jan 30th 2013, 6:52 pm
#3
Forum Regular
Thread Starter
Joined: Aug 2001
Location: Bletchley, UK
Posts: 216
Re: IRS 8833, UK SIPP - which IRC specifically?
There have been no contributions to it at all since I moved to the US - it's totally based on a transferred private pension scheme which was doing deplorably badly and has performed very well since I opened the SIPP.
The trouble with advice from the UK-Yankee forum (and indeed most other sources to get such questions answered) is that most of the answers assume that only non US residents or citizens would ask the question! And the answers are very different for resident US citizens.
It seems to be a grey area whether you even need to file the 8833 but most "experts" seem to agree that it's in your best interests to do so.
The $1,000 fine for getting an apostrophe in the wrong place (yes, I'm exaggerating) is a bitch though!
The trouble with advice from the UK-Yankee forum (and indeed most other sources to get such questions answered) is that most of the answers assume that only non US residents or citizens would ask the question! And the answers are very different for resident US citizens.
It seems to be a grey area whether you even need to file the 8833 but most "experts" seem to agree that it's in your best interests to do so.
The $1,000 fine for getting an apostrophe in the wrong place (yes, I'm exaggerating) is a bitch though!
Jan 30th 2013, 7:27 pm
#4
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: IRS 8833, UK SIPP - which IRC specifically?
I'd still ask at uk-Yankee.
If you are going to claim the treaty exemption for your SIPP I'd get some professional advice so you have a good argument if the IRS comes knocking. If you get this wrong and PFIC and trust issues arise it could get nasty.
If you are going to claim the treaty exemption for your SIPP I'd get some professional advice so you have a good argument if the IRS comes knocking. If you get this wrong and PFIC and trust issues arise it could get nasty.
Jan 31st 2013, 2:13 pm
#5
Member
Joined: Apr 2001
Posts: 14,049
Re: IRS 8833, UK SIPP - which IRC specifically?
I agree. Beyond the fact that professional advice should be better than well-meaning amateur advice, a professional tax preparer will generally stand behind their work or advice and support you should you be questioned by the IRS. They may even be liable, or accept liability, for the penalties should the IRS rule against you.
Regards, JEff
Regards, JEff
Regards, JEff
Regards, JEff
Jan 31st 2013, 2:56 pm
#6
BE Forum Addict
Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: IRS 8833, UK SIPP - which IRC specifically?
I've got a UK stakeholder pension, comprised of contributions from opting out of SERPS in the 90s (about 70% of the total) and then some personal contributions I added myself (30%). It's had no contributions for years, long before we even moved to the US and is a piffling amount, about 8k altogether. I've even moved it into cash within the pension wrapper rather than have the money in funds tracking European and overseas indexes, to try and avoid PFIC-ness (I'm not entirely sure if this applies to the pension wrapper/ company itself, or the funds held... cash just seemed simpler).
It's galling me enormously that since I have no clue how to go about reporting this, I shall end up paying for somebody expensive to do the tax return this first year. I just daren't take the chance of getting it wrong.
Oh well, hopefully they'll take a nice, clear position that I can just copy across onto next year's form.
It's galling me enormously that since I have no clue how to go about reporting this, I shall end up paying for somebody expensive to do the tax return this first year. I just daren't take the chance of getting it wrong.
Oh well, hopefully they'll take a nice, clear position that I can just copy across onto next year's form.
Jan 31st 2013, 4:10 pm
#7
Forum Regular
Thread Starter
Joined: Aug 2001
Location: Bletchley, UK
Posts: 216
Re: IRS 8833, UK SIPP - which IRC specifically?
I agree. Beyond the fact that professional advice should be better than well-meaning amateur advice, a professional tax preparer will generally stand behind their work or advice and support you should you be questioned by the IRS. They may even be liable, or accept liability, for the penalties should the IRS rule against you
Regards, JEff
Regards, JEff
It galls me enormously that this step is necessary but, hey-ho, in the scheme of things I guess it's just one more PIA in life's steady stream of them to deal with!
What's doubly infuriating is the Catch-22 situation:
The US pension funds are a doddle to report.
The UK ones are the aforementioned PIA. But, can you bring the UK ones here to solve the problem, can you hell!
So, Mr. Immigrant,
> if you have a UK fund you don't tell us about - we fine you gazillions of dollars.
> If you have a UK fund AND tell us about it but miss out one tiny detail of our totally incomprehensible forms - we fine you gazillions of dollars.
> If you want to make it simple and just bring it into the US system - Tough!
Jan 31st 2013, 4:36 pm
#8
BE Forum Addict
Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: IRS 8833, UK SIPP - which IRC specifically?
Wait till you retire. That's when reporting gets really interesting.
Jan 31st 2013, 5:20 pm
#9
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: IRS 8833, UK SIPP - which IRC specifically?
I'm soooooooooo glad I only have US retirenment accounts.....no UK pensions, just state pension one day.
If I return to the UK all I have to do for HMRC for my IRA, 403b and 401a is write a note on my self assessment form about them mentioning Article 18, job done. The only problem area might be the 457, but I'll roll that over to an IRA before I return.
When I start taking income because I'll be a UK/US citizen taxed on an arising basis by the UK, I'll just use Article 24 and tax credits to avoid double taxation. There's no worry about foreign trusts or non-reporting funds (UK's version of PFIC).
Contrast this to the UK citizen moving to the US and having UK pension plans. The complexity, worry and uncertainty is a million times more.
If I return to the UK all I have to do for HMRC for my IRA, 403b and 401a is write a note on my self assessment form about them mentioning Article 18, job done. The only problem area might be the 457, but I'll roll that over to an IRA before I return.
When I start taking income because I'll be a UK/US citizen taxed on an arising basis by the UK, I'll just use Article 24 and tax credits to avoid double taxation. There's no worry about foreign trusts or non-reporting funds (UK's version of PFIC).
Contrast this to the UK citizen moving to the US and having UK pension plans. The complexity, worry and uncertainty is a million times more.
Last edited by nun; Jan 31st 2013 at 5:40 pm.
Jan 31st 2013, 5:23 pm
#10
BE Forum Addict
Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: IRS 8833, UK SIPP - which IRC specifically?
Not helping nun, not helping 
But yes, I really wish there was a system to transfer these or cash them out. I honestly wouldn't mind paying the tax, a penalty, whatever, just to get shot of the problem - the stupid thing is that the amounts are so low it's likely to cost me more in professional advice over the years than the flipping fund will ever generate anyway <sulk>
But yes, I really wish there was a system to transfer these or cash them out. I honestly wouldn't mind paying the tax, a penalty, whatever, just to get shot of the problem - the stupid thing is that the amounts are so low it's likely to cost me more in professional advice over the years than the flipping fund will ever generate anyway <sulk>
Jan 31st 2013, 6:02 pm
#11
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: IRS 8833, UK SIPP - which IRC specifically?
Not helping nun, not helping
But yes, I really wish there was a system to transfer these or cash them out. I honestly wouldn't mind paying the tax, a penalty, whatever, just to get shot of the problem - the stupid thing is that the amounts are so low it's likely to cost me more in professional advice over the years than the flipping fund will ever generate anyway <sulk>
But yes, I really wish there was a system to transfer these or cash them out. I honestly wouldn't mind paying the tax, a penalty, whatever, just to get shot of the problem - the stupid thing is that the amounts are so low it's likely to cost me more in professional advice over the years than the flipping fund will ever generate anyway <sulk>
Jan 31st 2013, 6:37 pm
#12
Forum Regular
Thread Starter
Joined: Aug 2001
Location: Bletchley, UK
Posts: 216
Re: IRS 8833, UK SIPP - which IRC specifically?
I'm soooooooooo glad I only have US retirenment accounts.....no UK pensions, just state pension one day.
If I return to the UK all I have to do for HMRC for my IRA, 403b and 401a is write a note on my self assessment form about them mentioning Article 18, job done. The only problem area might be the 457, but I'll roll that over to an IRA before I return.
When I start taking income because I'll be a UK/US citizen taxed on an arising basis by the UK, I'll just use Article 24 and tax credits to avoid double taxation. There's no worry about foreign trusts or non-reporting funds (UK's version of PFIC).
Contrast this to the UK citizen moving to the US and having UK pension plans. The complexity, worry and uncertainty is a million times more.
If I return to the UK all I have to do for HMRC for my IRA, 403b and 401a is write a note on my self assessment form about them mentioning Article 18, job done. The only problem area might be the 457, but I'll roll that over to an IRA before I return.
When I start taking income because I'll be a UK/US citizen taxed on an arising basis by the UK, I'll just use Article 24 and tax credits to avoid double taxation. There's no worry about foreign trusts or non-reporting funds (UK's version of PFIC).
Contrast this to the UK citizen moving to the US and having UK pension plans. The complexity, worry and uncertainty is a million times more.
<Sigh> Life was so simple in our little Dorset village....
Remember ladies, this is the American Dream!
Feb 1st 2013, 1:03 am
#13
Retired
Joined: Apr 2004
Posts: 34,649
Re: IRS 8833, UK SIPP - which IRC specifically?
So, Mr. Immigrant,
> if you have a UK fund you don't tell us about - we fine you gazillions of dollars.
> If you have a UK fund AND tell us about it but miss out one tiny detail of our totally incomprehensible forms - we fine you gazillions of dollars.
> If you want to make it simple and just bring it into the US system - Tough!
> if you have a UK fund you don't tell us about - we fine you gazillions of dollars.
> If you have a UK fund AND tell us about it but miss out one tiny detail of our totally incomprehensible forms - we fine you gazillions of dollars.
> If you want to make it simple and just bring it into the US system - Tough!
You need to take the tax filing requirements seriously but at the same time don't panic. As long as you pay U.S. taxes due you are unlikely to get fined because you make some mistake on a form. At least - despite all the scaremongering - there aren't any reported cases of this happening (except for those who went into voluntary disclosure programs that they didn't need to be part of ... )
Feb 1st 2013, 1:18 am
#14
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: IRS 8833, UK SIPP - which IRC specifically?
Lots of U.S. citizens overseas are in the same situation.
You need to take the tax filing requirements seriously but at the same time don't panic. As long as you pay U.S. taxes due you are unlikely to get fined because you make some mistake on a form. At least - despite all the scaremongering - there aren't any reported cases of this happening (except for those who went into voluntary disclosure programs that they didn't need to be part of ... )
You need to take the tax filing requirements seriously but at the same time don't panic. As long as you pay U.S. taxes due you are unlikely to get fined because you make some mistake on a form. At least - despite all the scaremongering - there aren't any reported cases of this happening (except for those who went into voluntary disclosure programs that they didn't need to be part of ... )
Feb 1st 2013, 1:26 am
#15
Retired
Joined: Apr 2004
Posts: 34,649
Re: IRS 8833, UK SIPP - which IRC specifically?
Longer term, there will be political pressure on the IRS to make it clearer how different foreign investments - especially retirement funds in specific countries - fit into the U.S. tax system. In the meantime, there is no real evidence to suggest the IRS are out to penalize otherwise compliant taxpayers just for the sake of levying penalties.