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Personal Pension vs SIPP and other pension q's

Personal Pension vs SIPP and other pension q's

Old Feb 22nd 2018, 6:26 pm
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Default Personal Pension vs SIPP and other pension q's

OK. I have tried search and talking to people it feels like i am getting conflicting advise.

I have a personal pension in the UK. Now i live in the US and I am employed by a US based company that is no longer receiving contributions.

If that UK money is invested wisely i obviously hope it will grow in size. If I leave the money in a personal pension will i pay tax on the growth side ?

On advisor indicated it would need to be in a US compliant SIPP. Someone else said not to worry about it yet, just when i get close to retirement - 10+ years.

My current pension advisor in the UK is not licensed to give me advise as they are not certified for US apparently.

HELP

I am hoping to be here for a while and contribute to US Social long enough to qualify for social during retirement. Reading a couple of threads it seems to indicate that i would then lose some of my UK government pension.

That being the case how can you figure out how much you would lose ?

Maybe an example would be $20k/year US Social.

Sorry if these are question i should of found answers to and Ive noticed Ive put in the wrong sub forum

Cheers
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Old Feb 23rd 2018, 1:09 pm
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Default Re: Personal Pension vs SIPP and other pension q's

I assume you are already doing both FBAR (FinCEN form 114) and FATCA (IRS form 8938) reporting on your UK-based assets?

I only have a small defined benefit pension left in the UK, but my understanding is that the biggest problem with UK investments is PFIC reporting. Assets that count as PFICs are subject to high US taxes, and onerous reporting requirements. I don't understand why you would only worry about this when closer to retirement, given that you are subject to US tax rules as soon as you become tax resident.
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Old Feb 23rd 2018, 1:31 pm
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Default Re: Personal Pension vs SIPP and other pension q's

I have only been here 45 days

I am worrying about it now, it was an advisor that said many dont do anything until closer to retirement. My concern is getting it right now. I dont have total faith in some people working in this sector.

Ideally i dont want to pay any tax on gains made by my UK pension (I know come retirement and if still living here i will pay tax on income from it). I would also like to take a more active position in managing where the money is invested.

I dont want to pay a big chunk of money to move it and be lumbered with high annual costs etc.

Last edited by Chins; Feb 23rd 2018 at 1:34 pm.
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Old Feb 23rd 2018, 1:45 pm
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Default Re: Personal Pension vs SIPP and other pension q's

Originally Posted by Chins View Post
I have a personal pension in the UK. Now i live in the US and I am employed by a US based company that is no longer receiving contributions.
If you treat it as a pension plan under the tax treaty then there will be no tax until you take income at which point you'll have to pay US tax.
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Old Feb 23rd 2018, 2:01 pm
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Default Re: Personal Pension vs SIPP and other pension q's

Originally Posted by MidAtlantic View Post
If you treat it as a pension plan under the tax treaty then there will be no tax until you take income at which point you'll have to pay US tax.
My worry is that one advisor said having it as a personal pension i would pay tax now on any gains. I need to move to a US compliant SIPP and the other disagreed.
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Old Feb 23rd 2018, 4:25 pm
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Default Re: Personal Pension vs SIPP and other pension q's

Originally Posted by Chins View Post
My worry is that one advisor said having it as a personal pension i would pay tax now on any gains. I need to move to a US compliant SIPP and the other disagreed.
What type of private pension plan is it that is not a SIPP? Is it registered as a private pension plan with HMRC? If it is a plan not registered with HMRC then you will have difficulty I think getting the IRS to recognize it.

https://www.gov.uk/personal-pensions-your-rights

Paying into a personal pension

You can either make regular or individual lump sum payments to a pension provider. They will send you annual statements, telling you how much your fund is worth.

You usually get tax relief on money you pay into a pension. Check with your provider that your pension scheme is registered with HM Revenue and Customs (HMRC) - if it’s not registered, you won’t get tax relief.
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