nun

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.

nun

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.

taipan624

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.

nun

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.

shayward

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.

taipan624

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.

shayward

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

nun

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

shayward

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.

lansbury

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.

nun

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.

md95065

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?

shayward

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.

shayward

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.

Giantaxe

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?