My dinky UK pension / advice
#1
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Joined: Mar 2012
Posts: 15
My dinky UK pension / advice
I have a small pension with Clerical medical to the value of £500. I know, impressive investment. Once I move to the USA, it will languish here in the UK.
In the USA, I could cash it out. But in the UK I believe I can't do that. What happens to it? Can I move it to my USA pension fund? Can I get my sticky fingers on it in cash?
In the USA, I could cash it out. But in the UK I believe I can't do that. What happens to it? Can I move it to my USA pension fund? Can I get my sticky fingers on it in cash?
#2
Re: My dinky UK pension / advice
I have a small pension with Clerical medical to the value of £500. I know, impressive investment. Once I move to the USA, it will languish here in the UK.
In the USA, I could cash it out. But in the UK I believe I can't do that. What happens to it? Can I move it to my USA pension fund? Can I get my sticky fingers on it in cash?
In the USA, I could cash it out. But in the UK I believe I can't do that. What happens to it? Can I move it to my USA pension fund? Can I get my sticky fingers on it in cash?
What type of UK pension is it? An employee final salary pension, a personal pension? and who made the contributions; you or your employer. These things might be relevant to how the pension will be treated by the IRS.
Whether or not you can get to your cash is a question for your UK pension provider.
#3
Just Joined
Thread Starter
Joined: Mar 2012
Posts: 15
Re: My dinky UK pension / advice
You cannot move it to a US pension fund!
What type of UK pension is it? An employee final salary pension, a personal pension? and who made the contributions; you or your employer. These things might be relevant to how the pension will be treated by the IRS.
Whether or not you can get to your cash is a question for your UK pension provider.
What type of UK pension is it? An employee final salary pension, a personal pension? and who made the contributions; you or your employer. These things might be relevant to how the pension will be treated by the IRS.
Whether or not you can get to your cash is a question for your UK pension provider.
#4
Re: My dinky UK pension / advice
If you have the personal pension when you become US resident there are two options for how to deal with it:
1) claim tax treaty pension benefits under Article 18 of the UK/US tax treaty. This will shelter all gains from US taxation. You file 8833 to claim treaty benefits although for pensions the IRS says its not strictly necessary.
2) Don't claim treaty pension benefits. Then you have to file foreign trust and PFIC forms, but gains may well be US tax free under the treaty and you pay capital gains and dividend tax rather than income tax when you take distributions.
Tax professionals disagree about which approach is correct. It comes down to interpretation and which approach will produce the best financial result for the tax payer.
Last edited by nun; Apr 29th 2012 at 7:30 pm.