Transfer UK Defined Contribution Pension to USA
 

Hi,

Has anyone been able to transfer their UK pension funds to a US pension fund?

I have been reading up on QROPS and some sites say you can transfer, others say not at the moment.

Another place, Windsor Pensions offers to to the transfer via the EU, but that just seems kind of dodgy. And even if legal with all this FATCA stuff going around I'd rather not take a chance.

I anticipate retiring in the US, and having 5 funds hanging around in the UK is both an admin issue, and who knows what the laws with regards to pensions will be in the UK when I retire in 30 years.

I see there are a few US QROPS pensions listed on teh HMRC website, any-one tried any of them?

Cheers

Re: Transfer UK Defined Contribution Pension to USA
 

Someone is bound to ask you this anyway, but what visa do you anticipate? Healthcare etc etc?

Re: Transfer UK Defined Contribution Pension to USA
 

I am already here on a green card.

My wife is a USC.

And I am only 35 so quite a while to go until retirement, would just rather not have to worry about FBAR, etc for the next 30 years and then still have to worry about the tax situation when I retire.

Re: Transfer UK Defined Contribution Pension to USA
 

No problem then. The only issue I see is whether the US will still be here in 30 years :-)

Re: Transfer UK Defined Contribution Pension to USA
 

I don't think anyone has yet posted that they have been successful in transferring a UK pension to a US scheme. My wife and I certainly never found a way to do it.

Re: Transfer UK Defined Contribution Pension to USA
 

Forget it as it ain't happening and probably never will.

The UK is happy enough for you to transfer them. The IRS doesn't agree.

Re: Transfer UK Defined Contribution Pension to USA
 

what about a mid transfer? like going from UK to ??? to USA

would probably lose a bit of money in transfer fees but possibly an option?

this was the method that Windsor Pensions suggested to me...... not too sure about them though

Re: Transfer UK Defined Contribution Pension to USA
 

To my knowledge, nobody has managed it yet.

At this point we usually get a brand new user joining to state that if you just PM him, he'll see you right. However, I cannot remember anyone successfully posting a method whereby their UK pension ends up as a US pension on broadly similar tax terms and without penalty.

Re: Transfer UK Defined Contribution Pension to USA
 

it seems to be the US is shooting itself in the foot on this issue then.

lets say the average pension pot left in the UK is about $100,000, for some people it may be in the millions.

this money is sitting with a UK company, probably mostly invested in UK funds.

getting this issue sorted out would allow us brits to bring not insignificant sums of money into the US to be invested with US funds in mostly US companies.

this is a mini stimulus that the US is missing out on simply because some bureaucrat at the IRS can't be bothered with figuring out how to allow US pensions to accept the transfers.

i think a letter to the president may be in order.

Re: Transfer UK Defined Contribution Pension to USA
 

Why not transfer all your pension investments into a SIPP, I would wary of QROP's schemes expensive to set up and lots of scammers.

A SIPP still gives you control of your investments, which I like. The only problem which I am in the process of trying to get around. Is a lot of the UK brokerage houses that handle you stock purchases within the SIPP will not let you invest in US stocks they say ( The IRS does not want any US resident to be able to buy US stocks in the UK) I believe they have read it wrong in regard to SIPP's as the Investment are in the name of the SIPP provider. I have a broker that will handle my trades but is not cheap,$60 a trade buy and sell

I keep on hoping that the IRS will agree to the transfer of UK pension investments and have written many e mails on the subject to the Treasury Department etc. I have suggested to britishexpats.com that they arrange an online petition to the Whitehouse, IRS etc the IRS argument that they do not recognize British Pension Companys or their structure is ludicrous.

It is time the many thousand of ex pats that are facing this dilemma got together, I am hoping britishexpats will be that platform and am waiting to hear.

Re: Transfer UK Defined Contribution Pension to USA
 

Did you ever get a reply to any of your emails to the treasury?

Perhaps we do need to look into lobbying for this. It makes financial sense for the US to allow the money to come over here, so the position of the IRS defies all logic.... then again, its position on most things defies all logic.

Re: Transfer UK Defined Contribution Pension to USA
 

1) There's no way to transfer a UK pension fund to a US qualified fund like an IRA. Don't listening to people that tell you it's possible.

2) The status of SIPPs to the IRS is debatable. They may be foreign trusts and require a lot of bookkeeping and paperwork for US tax returns.

3) If your pension is employer sponsored it is probably covered under the US/UK tax treaty and it won't be taxed until you take income from it. Also if you are US resident when you take income from the pension there will be no tax due in the UK.

My advice would be to leave the pension where it is.

Re: Transfer UK Defined Contribution Pension to USA
 

As a UK resident the IRS taxes your worldwide income. So they will tax your pension income when you take it. The treaty allows tax deferral of qualified pensions to make cross border situations like yours more fair.

There would be enormous problems in trying to move pensions across borders given the very different legislation in the US and the UK.

Re: Transfer UK Defined Contribution Pension to USA
 

How come the HMRC are willing to allow the transfer tax free provided the US
Pension company's are on their approved list such as FIDELITY?

It is bureaucracy on behalf of the IRS, our two countries have one of the strongest tax treaty's. A 401K is exactly like a SIPP you are allowed to invest X amount of your income tax free. So where is the difference, we need to have our voices heard come on british expats get this petition organized.

QROPS from what one reads on the internet are full of company's trying to part you from your money.

It is time the IRS allows transfers Pension Company to Pension Company so we can invest and grow our funds for retirement, after all they are there with their hands out when it comes to taking income from your Pension. Ironic since they never involved in the tax allowed investments we made courtesy of the HMRC!

Re: Transfer UK Defined Contribution Pension to USA
 

Hi Shayward, yes I did get the standard reply from my Congressman and from the IRS. UK Pensions are not compliant with US Pension Plans such as 401K.

What a load of BS.

I did not get an answer form Senator Grassley who at the time oversaw the IRS nor todate Have I received an answer from the Treasury Department or Whitehouse.

I once I forget how but in my effort to get things changed, managed to get hold of the Tax Lawyer in Washington that is involved in Tax Law for the US Government, she could not believe that this problem existed and could see no reason why it should. I never realized how bureaucratic this country is over the most basic of things. However I am going to keep writing, and pushing it is hard enough to make your investments grow these days,the UK brokers give you inflated prices for US stocks, companys like Schwab in England will not get involved in SIPP's Barclays wont either running scared of the IRS ruling misinterpreted in my mind as per my earlier post. Then you had dear old Gordon Brown putting his hand into our Pensions three times by way of Windfall Taxes. It is beyond a joke what barriers have been put in our way. Knowing what I knowing what I know now I would have paid the taxes and instead put my money into property. Over sixty now and not an option.

Re: Transfer UK Defined Contribution Pension to USA
 

I really don't see the issue with just leaving your UK pension where it is, unless you don't like the investments/return of the plan or you're worried about FBAR and FATCA.

Re: Transfer UK Defined Contribution Pension to USA
 

Won't work because the IRS won't recognized the pension plan, and you'll have to deal with US taxes for what ever country you move the money to and the treaty might not be as advantageous as the UK/US treaty.

Re: Transfer UK Defined Contribution Pension to USA
 

I look after my own investments through my SIPP and trade mostly in American Stocks, fortunately at the moment I have a broker who allows such trades however the cost of the trades as they do not have direct access such as Barclays does means the cost of the trades are expensive which on short terms trades results in them earning more money than my pension.

Their are other UK Brokers who do have DMA such as Barclays but they are running scared of the IRS stipulation that American Citzens or residents cannot trade US stocks in the UK. It is my belief and I am going to look into it further this should not apply to SIPP's as the investment is held in the name of the Administrator of the SIPP.

I just refuse to believe in this day and age especially that a Bona Fide Pension cannot be transferred especially if such a transfer has to be cleared by the HMRC. I will keep fighting so I have a chance to make my own investment decisions.

Re: Transfer UK Defined Contribution Pension to USA
 

Do you file the IRS foreign trust forms or take a treaty position for your SIPP? I'm interested as this is an area of debate.

Re: Transfer UK Defined Contribution Pension to USA
 

I have decided to do just that. They were all defined contribution schemes that my accountant (and some-one at H&R Block) all agree cannot be transferred to the US, and should just be left in the UK until I retire.

At the moment there are 5 of them, so i might transfer them all into 1 to simplify things a little.

Just got to remember to report them on the FBAR form every year for the next 30 years :)

Fortunately they are below $100,000 in value so no need to worry about FATCA, for a reasonable while at least anyway.

Re: Transfer UK Defined Contribution Pension to USA
 

To date the IRS has not made a ruling on these so it continues to be a grey area. You should consult with your tax preparer before opening one of these accounts. The bigger tax trap is the ISA (“Individual Savings Account”). These are considered a foreign trust by the IRS and you do need to report your income and capital gains in these accounts each year on your US tax return (even though it is tax-free in the UK). You will need to pay tax on the income and gains from these accounts. SIPP’s and ISA’s will also need to be reported on your FBAR (“Foreign Bank Account Form”) each year.

Re: Transfer UK Defined Contribution Pension to USA
 

Try ACA http://www.aca.ch/joomla/index.php they are actively campaigning on issues just like this.

Re: Transfer UK Defined Contribution Pension to USA
 

Cash ISAs are ok as they are NOT foreign trusts, but the interest on them is still taxable in the US. The problem with stocks and shares ISAs, SIPPs etc is that the IRS classifies them as foreign trusts leading to extra filing requirements, and if they own unit trusts then PFIC issues too. Some professionals say that the SIPP falls under the definition of a pension for treaty purposes, but others say doesn't.

http://talk.uk-yankee.com/index.php?topic=73909.0

Re: Transfer UK Defined Contribution Pension to USA
 

For those of you still interested in looking into bringing your pension funds to the US, I found this company that claims to have the ability to do that.

http://www.waterstone-investment-associates.com

They look legit, and i did contact them, but they turned me down as you need to have at least 52,000 pounds in your pension to qualify.

May be worth looking into.

Re: Transfer UK Defined Contribution Pension to USA
 

WATERSTONE-INVESTMENT-ASSOCIATES.COM
Registrar: GODADDY.COM, LLC

Creation Date: 17-jun-2011 - makes you wonder about their claim to have been doing transfers to the US for three years.

Re: Transfer UK Defined Contribution Pension to USA
 

If you read the site it never says that the QROPS transfer is to the USA, just that it meets IRS regulations. This sounds like an "insurance wrapper" scheme to protect assets. Once they charge you for the transfer there will also be lots of hidden fees. You have to have big tax savings and be a sophisticated investor to make these work.

Re: Transfer UK Defined Contribution Pension to USA
 

No - it sounds like an accurate answer to me.

Why on earth do you suppose that US tax regulations should be required to recognize UK pension plans?

Re: Transfer UK Defined Contribution Pension to USA
 

possibly because we have a tax treaty that already recognises them and QROPS appears to be an internationally accepted way to move pensions from country to country.

why do you suppose that they shouldn't?

there is very little logic in the IRS's attitude.

Re: Transfer UK Defined Contribution Pension to USA
 

you are right. i took another look and they talk about the schemes being FATCA compliant.

if they were moving the money to the US then FATCA wouldn't be an issue.

Re: Transfer UK Defined Contribution Pension to USA
 

Even if the IRS wanted to, there would be obvious problems in them doing so. For example 401(k)/403(b) contributions are subject to annual limitations in order for them to get the privileged status of contributions being pre-tax and capital gains/income not being taxed until withdrawal. Similarly IRA contributions are limited both in size and eligibility based on one's adjusted gross income etc. A transfer maybe a nice idea in theory, but how could the IRS in practical terms be guaranteed that contributions made in the UK fit these requirements?

Re: Transfer UK Defined Contribution Pension to USA
 

perhaps a fairer system would allow people to take pension accounts in the uk and withdraw all the cash, with a penalty, so that they can then take the money where they please.

this could be placed alongside a requirement that you have been out of the UK for so many years perhaps.

i guess we shouldn't complain too much really. there are poor starving people in the world, compared to that, not being able to move your pension to the US is hardly a real problem.

Re: Transfer UK Defined Contribution Pension to USA
 

This is an argument for UK pension reform rather than the cross-border portability of pensions. IMHO if you put money into a pension you should be planning on leaving it alone until you retire. I admit that in emergencies it might be convenient to get at the money, but moving to another country wouldn't make me want to mess with my US retirement funds.

After 25 years of employment in the US I have an IRA, ROTH, two 403b, 401a and a 457b. When I can I will consolidate these accounts, but there's no need or reason to move them if I return to the UK as I can manage them easily and they are dealt with sensibly under the Tax Treaty.