British Expats

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-   -   Pension/Trust (https://britishexpats.com/forum/usa-57/pension-trust-923743/)

dee98 Apr 1st 2019 9:29 am

Pension/Trust
 
​​​​I have been researching into determining what is a foreign trust vs a pension from what I gather if you contribute more vs your employer it is considered a trust? I roughly have about $800-900 in my pension.

I had a foreign pension scheme (work pension) that I was auto-enrolled in via my UK employer. I believe I had 1% come out my check to go my employer pension plan, my employer was a common UK retailer, I can't touch or wirhsraw from it until I retire. Is 3250 required for me?

When discussing with my wife her understanding was that if I contributed more to the pension scheme outside of the percentage that came out my (employer) pay check contributions this would make it a foreign trust?

A bit like contributing a chunk to a 401k in addition to the % you have setup to deduct from your paycheck.

Would this be correct? Nothing has went into my pension other than what came out my pay check I am trying to understand if my understanding of employer contributions is correct i.e the percentage that comes out your check and into the plan

dee98 Apr 1st 2019 2:43 pm

Re: Pension/Trust
 
Upon review of my pension scheme online my total employer contributions are higher than my employee contributions , with that being said with this not be considered a trust and a 3250 is not required?

Hotscot Apr 1st 2019 3:05 pm

Re: Pension/Trust
 
'When discussing with my wife her understanding was that if I contributed more to the pension scheme outside of the percentage that came out my (employer) pay check contributions this would make it a foreign trust?'

You certainly seem to have many complex tax issues on your mind Dee:lol: (But it seems your tax situation is pretty simple from what you've posted previously?)

Why is that her understanding specifically? Can you quote the IRS guidance?

(How did the question even come up?)

dee98 Apr 1st 2019 3:23 pm

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664239)
'When discussing with my wife her understanding was that if I contributed more to the pension scheme outside of the percentage that came out my (employer) pay check contributions this would make it a foreign trust?'

Why is that her understanding specifically? Can you quote the IRS guidance?

(How did the question even come up?)

Good Morning Hotscot,

We were chatting about whether the 3250 applied to me as I am unsure, I'm not too great with pensions/taxes so I apologise if any of my questions come across as basic or stupid.This forum has been a huge help with any immigration or tax related questions, the assistance and advice from fellow expats has been immensely appreciated everyone on here has been fantastic! :thumbup:

Would I be correct in saying from what I provided above my pension is not a trust as my employer contributions was greater than mine?

Hotscot Apr 1st 2019 3:25 pm

Re: Pension/Trust
 
No need to apologize. Everyone can ask questions.

Why do you think it's a trust?
Can you quote the IRS guidance that makes you, or your wife, think this?
How did the question come up?

dee98 Apr 1st 2019 3:26 pm

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664249)
Why do you think it's a trust?
Can you quote the IRS guidance that makes you think this?

I can't but I asked another user who mentioned a 3250 though I was unsure whether they mentioned this as they were unaware that it was dormant and that I was not withdrawing from it or the value .

I guess from what I noted it's not a trust then?, my employer matched my minimum % contributions and when I review my contributions vs my employer contributions their contribution was higher than mine.

My situation is probably simple and I am over complicating things. Apologies again if my questions seem like rookie questions :blink:

Hotscot Apr 1st 2019 4:19 pm

Re: Pension/Trust
 
No, don't apologize. Everyone has questions.

I just feel, from what you've provided so far, that you are overthinking, and that your personal tax situation is pretty straightforward. (And that you shouldn't go looking for potential niche issues that may or may not apply to you.)

Cook_County Apr 1st 2019 5:29 pm

Re: Pension/Trust
 
https://talk.uk-yankee.com/index.php?topic=96109.0

dee98 Apr 1st 2019 5:45 pm

Re: Pension/Trust
 

Originally Posted by Cook_County (Post 12664344)

Hi cook county,

I asked on another forum that was not BE I am unsure why you are referencing the post. I apologise if I did anything wrong I am seeking advice/help on the issue.

Hotscot Apr 1st 2019 5:52 pm

Re: Pension/Trust
 
You're not doing anything wrong.
But how will you know you have a correct answer unless you engage a qualified professional?

Your situation seems simple.

Or are you asking for a 'friend'?

dee98 Apr 1st 2019 6:03 pm

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664366)
You're not doing anything wrong.
But how will you know you have a correct answer unless you engage a qualified professional?

Your situation seems simple.

Or are you asking for a 'friend'?

Hi Hotscot,

That is true, can you provide any advice for my situation with regards to whether I do or do not have a trust. I am stressing over this and this is the last thing that I had a question about and then I was done believe it or not . I appreciate your input and also theOAP and cook_county, sorry for asking an abundance of questions taxes are not easy and it's alot to learn for someone new to it .

Look forward to your reply

Many Thanks

Dee

Hotscot Apr 1st 2019 6:09 pm

Re: Pension/Trust
 
Dee.

If you're stressing over this why do you think you have a trust?
You need to provide more detail as to why.
Nothing you've indicated suggests any complexity.

Quote the IRS guidance please.

(Are you a tax person trying to help a client?)

dee98 Apr 1st 2019 6:22 pm

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664382)
Dee.

If you're stressing over this why do you think you have a trust?
You need to provide more detail as to why.
Nothing you've indicated suggests any complexity.

Quote the IRS guidance please.

(Are you a tax person trying to help a client?)

Because I asked cook_county via PM and he mentioned a 3250 in addition to 8938 and Fbar though I was unsure if the user knew about everything of my situation in terms of finance in accounts not meeting the threshold to file 8938 or Fbar etc so I have been stressed since then and scouring the net for an answer.
​​​​
No I am not a tax person or have clients I'm trying to help :lol:

Hotscot Apr 1st 2019 6:31 pm

Re: Pension/Trust
 
Understood Dee.

I personally don't think your accounts are complex.
However the only real way to give specific advice is for you to list all your non-US accounts, their types, and their values.

You seem to be stressing needlessly.

dee98 Apr 1st 2019 7:44 pm

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664397)
Understood Dee.

I personally don't think your accounts are complex.
However the only real way to give specific advice is for you to list all your non-US accounts, their types, and their values.

You seem to be stressing needlessly.

Thank you, I sent a follow-up message to you

Hotscot Apr 1st 2019 9:09 pm

Re: Pension/Trust
 
No pm's please.

dee98 Apr 1st 2019 9:46 pm

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664473)
No pm's please.

Hi Hotscot no problem, here is an overview below

*​​​​​​UK employer work pension plan (defined contribution plan)/ dormant (under $900 / my employer contributions were higher than my contributions this was confirmed by viewing my pension online )

*UK bank account - (under $100, no interest)

Last year I filed a FBAR as my bank account was a bit over the $10k I noted my pension on this as well.


Hotscot Apr 1st 2019 9:58 pm

Re: Pension/Trust
 
It doesn't look like you have a trust. Unless I'm missing something.
Why are you stressed?

It looks like you've nothing, non-US, to report.

dee98 Apr 1st 2019 10:25 pm

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664507)
It doesn't look like you have a trust. Unless I'm missing something.
Why are you stressed?

It looks like you've nothing, non-US, to report.

I started to second guess because cook county mentioned a list of docs when I messaged him... though to look back I was unsure if they were covering all that I should review or that were applicable in my situation. Though from speaking with you I assume it is not a trust and I should not of assumed.

Apologies to any users I messaged asking for advice, US taxes are new to me and I want to ensure all is correct. Sorry to cook_county and theOAP for messaging for advice I view both of you as great experts with a wealth of knowledge and appreciate all the support you provide users on here.

Lastly a big thank you to yourself hotscot for all the help you have provided it really is much appreciated

I guess for clarity am I correct in saying my UK pension comes into play every year on a schedule B part3, on a FBAR and 8938 (when applicable) and most definitely when I retire and withdraw from it.

​With regards to my first year taxes (last year) any contributions made to my pension plan before I became a US resident/moved across the pond are not noted on taxes, is this correct??
​​​​​​

Hotscot Apr 2nd 2019 1:08 am

Re: Pension/Trust
 

Originally Posted by dee98 (Post 12664519)
I guess for clarity am I correct in saying my UK pension comes into play every year on a schedule B part3, on a FBAR and 8938 (when applicable) and most definitely when I retire and withdraw from it.

​With regards to my first year taxes (last year) any contributions made to my pension plan before I became a US resident/moved across the pond are not noted on taxes, is this correct??
​​​​​​


Comes into play...not sure what you mean but I think you're not taking any income from it currently? If you're not I don't think you need to report it even if it's generating interest/dividends inside the pension wrapper. (Unless it reaches FBAR/FATCA thresholds.)

Pension contributions not noted.

dee98 Apr 2nd 2019 1:13 am

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664556)
Comes into play...not sure what you mean but I think you're not taking any income from it currently? If you're not I don't think you need to report it even if it's generating interest/dividends inside the pension wrapper. (Unless it reaches FBAR/FATCA thresholds.)

Pension contributions not noted.

Brilliant thank you very much Hotscot, what I meant was when it gets noted in the future .I guess going forward for US taxes I will remember to refer to it when doing schedule B part 3 and will always include it on the Fbar in any future year that requires a FBAR!

On my year 1 taxes in reference to my pension I noted my pension on the FBAR I assume that was correct and all required for year one?

Thank you once again mate!

Hotscot Apr 2nd 2019 1:35 am

Re: Pension/Trust
 
FBAR and if you were a tax resident in Year 1 and if it reached the threshold, yes.

(I don't think you need to report on Schedule B until you actually take income from it.)

dee98 Apr 2nd 2019 2:03 am

Re: Pension/Trust
 

Originally Posted by Hotscot (Post 12664561)
FBAR and if you were a tax resident in Year 1 and if it reached the threshold, yes.

(I don't think you need to report on Schedule B until you actually take income from it.)

Thanks again Hotscot you are a legend! :thumbsup:

Yeah when I mentioned schedule B I meant I will always complete part 3 for foreign accounts since I have a bank account and pension and answer the Fbar question as it applies and no to the trust question since I do not have a trust.


Hotscot Apr 2nd 2019 2:05 am

Re: Pension/Trust
 
It's nothing...:o


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