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Transfer UK Defined Contribution Pension to USA

Transfer UK Defined Contribution Pension to USA

Old Feb 23rd 2012, 2:25 pm
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Default 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
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Old Feb 23rd 2012, 2:48 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by shayward View Post
I anticipate retiring in the US
Someone is bound to ask you this anyway, but what visa do you anticipate? Healthcare etc etc?
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Old Feb 23rd 2012, 2:49 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by sir_eccles View Post
Someone is bound to ask you this anyway, but what visa do you anticipate? Healthcare etc etc?
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.
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Old Feb 23rd 2012, 3:29 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by shayward View Post
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.
No problem then. The only issue I see is whether the US will still be here in 30 years :-)
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Old Feb 23rd 2012, 4:59 pm
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Default 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.
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Old Feb 23rd 2012, 5:11 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by shayward View Post
I see there are a few US QROPS pensions listed on teh HMRC website, any-one tried any of them?

Cheers
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.
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Old Feb 23rd 2012, 6:03 pm
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Default 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
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Old Feb 23rd 2012, 6:13 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by shayward View Post
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
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.
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Old Feb 24th 2012, 3:12 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by fatbrit View Post
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.
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.
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Old Feb 24th 2012, 7:58 pm
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Default 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.
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Old Feb 24th 2012, 8:03 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by taipan624 View Post
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.
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.
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Old Feb 25th 2012, 12:28 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by taipan624 View Post
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.
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.
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Old Feb 25th 2012, 12:32 pm
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Default Re: Transfer UK Defined Contribution Pension to USA

Originally Posted by shayward View Post
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.
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.
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Old Feb 25th 2012, 1:54 pm
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Default 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!
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Old Feb 25th 2012, 2:12 pm
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Default 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.
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