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Moving back to UK

Moving back to UK

Old May 13th 2021, 12:24 am
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Default Moving back to UK

I'm sorry, I'm sure this question has been asked before and I'll trawl through using the search function, I promise. I'm a dual citizen and have lived in the USA for 19 years. Retirement is not too far away and I'm looking to move back to the UK or France; maybe both! Before that happens though I really need a financial adviser to make sure that the IRS don't take a huge chunk of my retirement before I leave. I also need to know about collecting my federal pension, company pension, 401K and so on. Can anyone recommend a financial adviser that could help me out here? I live in Austin, TX so local would be preferable, but I'm open to anyone if they have a good reputation and experience of handling this. Thanks.
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Old May 13th 2021, 4:03 pm
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Default Re: Moving back to UK

Don't know of any financial advisors but can add the following.

As a US citizen you are subject to taxes worldwide, so short or renouncing your US citizenship there is little you can do to stop the IRS taking what is due. If you renounce your US citizenship they have what they call an exit tax which you may or may not be subject to depending upon your personal circumstances. It generally only applies to individuals with a pretty high net worth but if you Google US Citizen Exit Tax you will get the information you need. I am pretty sure the IRS will still tax your 401K distributions even if you renounce citizenship, I think the rate is 30% unless the country you live in has a tax treaty with the US, more on that below. Renouncing citizenship will alleviate you from the reporting requirements for foreign investments, but is a formal process that you need to go through. You should think carefully about the pros and cons of doing so.

In any case, whether or not you renounce citizenship, the UK and US have a tax treaty to ensure that you do not pay double tax. You will get credit tor tax paid in the country with largest tax bill equal to the amount paid in the country that has the smaller tax bill such that you will be subject to the larger tax amount but will only have to pay the difference between the lower and larger amounts. France likely has a similar treaty. If you Google US/US or France/US Taxation Treaty you should get a lot of information on that.

You should be able to apply for your pensions and withdraw from your 401K as if you were still living here but will likely need a US bank account to deposit them. Maybe the federal pension can be deposited into an overseas account, others can likely advise.

Last edited by Glasgow Girl; May 13th 2021 at 4:10 pm.
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Old May 13th 2021, 4:30 pm
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Default Re: Moving back to UK

Originally Posted by ianisme View Post
I'm sorry, I'm sure this question has been asked before and I'll trawl through using the search function, I promise. I'm a dual citizen and have lived in the USA for 19 years. Retirement is not too far away and I'm looking to move back to the UK or France; maybe both! Before that happens though I really need a financial adviser to make sure that the IRS don't take a huge chunk of my retirement before I leave. I also need to know about collecting my federal pension, company pension, 401K and so on. Can anyone recommend a financial adviser that could help me out here? I live in Austin, TX so local would be preferable, but I'm open to anyone if they have a good reputation and experience of handling this. Thanks.
My wife and I retired back to England after 29 years living in Texas and Louisiana and it’s really not bad if you prepare ahead of time. I took advice from forums like this and didn’t need to use a financial advisor. Some points to note.

We have maintained a US bank into which our private pensions and brokerage is linked. We had to switch our US bank ahead of time to one that supports overseas customers.

Once retired and before moving back we checked that the brokerage account that held our IRAs supported overseas customers. We rolled our 401ks into IRAs in our chosen brokerage. This is a tax free event.

We also had taxable mutual funds outside of our IRAs. We converted those to their ETF equivalents that are listed as HMRC reporting funds which means they receive the favorable HMRC tax rates for dividends and capital gains.

We have been in England for 5 years now and it all works well. Money flows into our US bank account and we transfer what we need to our UK bank. We each do an annual self assessment for HMRC taxes plus a Married Filing Jointly IRS tax return and take foreign tax credits to reduce our US taxes since we pay more tax in the UK, but of course we don’t have the large premiums and other costs for healthcare that we had in the US so it all evens out quite nicely.

In our case I have the larger fixed income from pensions so before we moved we removed my name from our after tax investments to make the best use of 2 personal HMRC tax exemptions. Consequently we have been paying no or little UK tax on withdrawals and dividends.

ETA
i also maintained my US Skype account which means I have free calls to bank and brokerage etc on the few occasions I need to call as a US Skype account (no annual fee) supports the 800 toll free numbers.

Last edited by durham_lad; May 13th 2021 at 4:46 pm.
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