My 1600 GBP UK Pension
#16
Re: My 1600 GBP UK Pension
This is all a bit worrying to read. My OH had a private pension plan before he left the UK back in 2004. Like you all confirmed, it was nigh on impossible to do a QROPS transfer, so it's just been sitting there. Its been "out of sight, out of mind" and TBH, we totally forgot about it until I read this thread.
I think it may have had about £6k or £7k in it back in '04. We have no idea what's in it now, as he doesn't get any statements from them. I guess we are going to have to track this down and see about getting statements again so we can file a form on it (whichever form that might be).
Does anyone think we'll have problems with doing the reporting on this all of a sudden, or will the IRS think we've been hiding it all these years and penalize us for it? Hell, it's not like we can do anything with it, except let it sit there.
I think it may have had about £6k or £7k in it back in '04. We have no idea what's in it now, as he doesn't get any statements from them. I guess we are going to have to track this down and see about getting statements again so we can file a form on it (whichever form that might be).
Does anyone think we'll have problems with doing the reporting on this all of a sudden, or will the IRS think we've been hiding it all these years and penalize us for it? Hell, it's not like we can do anything with it, except let it sit there.
#17
Re: My 1600 GBP UK Pension
Wrong. Unless the Pound drops dramatically, and even if filing 'married filing jointly', 100K GBP (@1.60) means you may have to file 8938 (Part II) with your 1040 if you have that amount in the SIPP on 31 December 2011 and you are resident in the US.
http://www.irs.gov/pub/irs-dft/i8938--dft.pdf
(see page 2 of instructions.)
Not to pry, but was the pension really 'lost'. Did the funds always exist, but not to your knowledge? If so, be prepared to explain to the Treasury/IRS why you were unaware of it, and therefore didn't file FBARs if required. (This isn't meant to cause panic. If you were truely unaware, then it's just an explanation, if asked.)
http://www.irs.gov/pub/irs-dft/i8938--dft.pdf
(see page 2 of instructions.)
Not to pry, but was the pension really 'lost'. Did the funds always exist, but not to your knowledge? If so, be prepared to explain to the Treasury/IRS why you were unaware of it, and therefore didn't file FBARs if required. (This isn't meant to cause panic. If you were truely unaware, then it's just an explanation, if asked.)
I was also a bit worried about the lack of previous FBARs for the $100k pension so this is a situation where where professional advice is definitely needed.
#18
Re: My 1600 GBP UK Pension
Well, actually next year will be the first year since I started the SIPP. ... I don't need to declare this on the tax return since there's no income. Of course, when I start to take income, whether here or in the UK, since I'm a US citizen I will have fairly complex tax situations then...
#19
Re: My 1600 GBP UK Pension
This is all a bit worrying to read. My OH had a private pension plan before he left the UK back in 2004. Like you all confirmed, it was nigh on impossible to do a QROPS transfer, so it's just been sitting there. Its been "out of sight, out of mind" and TBH, we totally forgot about it until I read this thread.
I think it may have had about £6k or £7k in it back in '04. We have no idea what's in it now, as he doesn't get any statements from them. I guess we are going to have to track this down and see about getting statements again so we can file a form on it (whichever form that might be).
Does anyone think we'll have problems with doing the reporting on this all of a sudden, or will the IRS think we've been hiding it all these years and penalize us for it? Hell, it's not like we can do anything with it, except let it sit there.
I think it may have had about £6k or £7k in it back in '04. We have no idea what's in it now, as he doesn't get any statements from them. I guess we are going to have to track this down and see about getting statements again so we can file a form on it (whichever form that might be).
Does anyone think we'll have problems with doing the reporting on this all of a sudden, or will the IRS think we've been hiding it all these years and penalize us for it? Hell, it's not like we can do anything with it, except let it sit there.
#20
BE Forum Addict
Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: My 1600 GBP UK Pension
The answer to the above question is "who knows?". As you've discovered from other sites (and nun's previous link to the intuit site), even the professionals can disagree. If the funds were in a UK company defined benefit scheme that can be equated to a US company defined benefit scheme, then in most cases, the answer would be no FBAR required (This is my understanding, and could be wrong!). But, you are defining the pension as a private scheme, so all the rules change. £7,000 at 1.60(est.) takes you over the FBAR threshold. The more critical observers will say you should have been filing FBARs and should take steps to correct the situation. Others will say now that you realise the situation, start reporting the pension on 2011 reports and hope for the best. You and your OH will have to determine your choice, possibly with the help of a competent tax advisor. They may, or may not, be 100% correct in their assessment since no one knows what is 100% correct (at times, not even the IRS).
I hate to continue using indefinite words such as 'most', 'could', 'may', and 'possibly', but there really are no straight forward answers for all FBAR and FATCA issues. They are subject to interpretation. As I've noted, you can get two opposite opinions even from professionals.
#21
Re: My 1600 GBP UK Pension
If I'm following your situation correctly, you'll be back in the US next year. After your adventures of this year, it would be advisable to seek assistance with your 2011 US return and 2011/12 UK return.
The answer to the above question is "who knows?". As you've discovered from other sites (and nun's previous link to the intuit site), even the professionals can disagree. If the funds were in a UK company defined benefit scheme that can be equated to a US company defined benefit scheme, then in most cases, the answer would be no FBAR required (This is my understanding, and could be wrong!). But, you are defining the pension as a private scheme, so all the rules change. £7,000 at 1.60(est.) takes you over the FBAR threshold. The more critical observers will say you should have been filing FBARs and should take steps to correct the situation. Others will say now that you realise the situation, start reporting the pension on 2011 reports and hope for the best. You and your OH will have to determine your choice, possibly with the help of a competent tax advisor. They may, or may not, be 100% correct in their assessment since no one knows what is 100% correct (at times, not even the IRS).
I hate to continue using indefinite words such as 'most', 'could', 'may', and 'possibly', but there really are no straight forward answers for all FBAR and FATCA issues. They are subject to interpretation. As I've noted, you can get two opposite opinions even from professionals.
The answer to the above question is "who knows?". As you've discovered from other sites (and nun's previous link to the intuit site), even the professionals can disagree. If the funds were in a UK company defined benefit scheme that can be equated to a US company defined benefit scheme, then in most cases, the answer would be no FBAR required (This is my understanding, and could be wrong!). But, you are defining the pension as a private scheme, so all the rules change. £7,000 at 1.60(est.) takes you over the FBAR threshold. The more critical observers will say you should have been filing FBARs and should take steps to correct the situation. Others will say now that you realise the situation, start reporting the pension on 2011 reports and hope for the best. You and your OH will have to determine your choice, possibly with the help of a competent tax advisor. They may, or may not, be 100% correct in their assessment since no one knows what is 100% correct (at times, not even the IRS).
I hate to continue using indefinite words such as 'most', 'could', 'may', and 'possibly', but there really are no straight forward answers for all FBAR and FATCA issues. They are subject to interpretation. As I've noted, you can get two opposite opinions even from professionals.
#22
Re: My 1600 GBP UK Pension
Believe me, we will be seeking help with our taxes for this year. We're just not sure where to begin to look for accountants on the US side of the pond (or if we'd be better off using someone in the UK). We've always used TurboTax, and I wonder just how easy it's going to be find a tax advisor versed in the UK/US tax treaty and foreign income.
#23
Forum Regular
Joined: Aug 2001
Location: Bletchley, UK
Posts: 216
Re: My 1600 GBP UK Pension
I'd given Greenback tax services a try. Some people have reported good experiences with them. I have no personal knowledge of them, but at least their website is reasonably informative. For a full service option that might be a bit expensive, but you'll have personal service from a very well informed accountant try British American Tax
#24
Re: My 1600 GBP UK Pension
Inexpensive would be $300 to $400 for a return. Expensive would be 2 or 3 times that and a few hundred an hour for consulting.
Last edited by nun; Dec 2nd 2011 at 11:09 pm.
#25
Forum Regular
Thread Starter
Joined: May 2011
Posts: 34
Re: My 1600 GBP UK Pension
Hello Mr,
I apologise for the delay in coming back to you regarding transferring you pension to a plan in USA.
I have received a response from our Legal department that states US schemes do not accept direct transfers from overseas schemes (to them), whereas the UK regime does not allow us to release the funds
to you to be paid to the US scheme as a member contribution. Therefore, to the best of our knowledge, the transfer cannot proceed.
This would, however, need to be checked with an expert in the US system, probably in the form of a US pensions/financial advisor, or a US pensions provider.
I'm sorry I wasn't aware of the US rules regarding pension transfers when we spoke on 30 November, and do apologise for any inconvenience caused.
Regards.
#26