TRPardoe

I have the opportunity to take my UK Merchant Navy Pension any time from now on. I am 55 this October.

The options are "X" amount per annum or, a lump sum and "Y" amount per annum.

Anybody done this recently? What are the tax implications?

My wife thinks I will lose about half the lump sum in US taxes if I take it.

I pay no UK tax, all my taxation is here.

BigDavyG

Serious question - how would the yanks found out if you took it as a lump sum ??

TRPardoe

It would have to be paid through a UK bank, if not a US one. I doubt I could roll up to the Pension Fund door and get £s cash.

Then, when you brought over $100,000 to the US........

If you did not declare foreign income and got caught - shit happens............

Sally

Davy is a right dodgy one ain't he?

Jerseygirl

It was the IRS that got Al Capone not the FBI. :scared:

paddingtongreen

There are too many unknowns here for anyone to give advice. Do you fund your 401k to the max, are you elligable for an IRA, what was your marginal tax rate. The amount of the foreign pension that you receive is added to your income, could you offset the tax by funding a 401k or an IRA.

You need to get the forms and do some what if spreadsheets.

BigDavyG

Fair do's.
Is getting paid into a UK bank not an option then bung it in a savings account or whatever and dip into it when required ??
Given that you'll get stung with the exchange rate anyway taking it over in dribs and drabs won't cost you that much more.

Jerseygirl

You don't think the IRS and UK Inland Revenue liaise? If you're not a USC you could face deportation or prison or both, if you are a USC you would probably just face a prison sentence. BTW I am sure they never monitor forums such as BE...so please carry on disclosing how to swindle the IRS.

Sally

And keep telling us how moral standards have gone down

Ray

If you don't need the money here ...have it paid into your uk a/c
then leave it there for when you go on vacation to the UK .....

TRPardoe

My one UK account, in Bournemouth, is with what may be the only Building Society in the world which still requires you to have your Account Book there when you withdraw or transfer funds. They don't have electronic banking either although you can do transfers if you mail them your book.

It's a Right Royal Pain in the ass.

Ever tried to open an account in the UK these days when you are domiciled overseas ?

Manc

TRPardo......


personally if I were you, I'd wait until you were at least 59 1/2 to take any pension, be it UK or USA......

also, wait until you've good and proper retired before you take it, as the loss in income from your job might possibly put you in a lower tax bracket than you are now.

but I am not an accountant nor financial advisor.

Ray

Yes!! nigh on impossible, but an offshore account may be possible ..
Well if nothing else you remind us all DO NOT CLOSE your UK bank account
Get a FIRST DIRECT account or something similar... basically internet banking
and you can add an E saving account to it as well.. and tranfer between the two with ease....

TRPardoe

My Mother's Co-Op bank would not let her put me on it as a joint account holder unless I had three months of utility bills at her address in my name.

I now have an Enduring Power of Attorney so they have no choice any more.

However the Co-Op bank will let me have an Offshore account. I am just not sure it is worth the hassle and possible suspicion of motive from the IRS.

The unknown is how much my Pension Fund's bank will charge in Commissions and Fees for transfers and what rate they will use in comparison to XETrade. I really would prefer the funds in a UK account and then use XETrade for transfers. The best of both worlds.

TouristTrap

There is ONE agency in the world you don't f***k with!!!