Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Transfering Pension from UK to US

Transfering Pension from UK to US

Old Mar 24th 2012, 9:59 pm
  #1  
Just Joined
Thread Starter
 
Joined: Mar 2012
Posts: 2
Geoff_Spence is an unknown quantity at this point
Talking Transfering Pension from UK to US

Hi!

I have recently moved from London to New York. I married my (American) wife and now that all the paperwork has come through, I have finally started working. Annoyingly my company doesnt offer a matched 401K plan (yet) but its something they will do this year. I worked in the UK for 5 years and contributed to a pension for about 3 of those - so I have a fairly small pension but still worth something... I dont expect to move back to the UK so thinking of getting my Pension transferred to the US. Does anyone have any experience in doing this? Do you transfer the money into my 401K or how does it work? And will I have to pay tax on that money....?

Any help would be greatly appreciated.

Thanks!
Geoff_Spence is offline  
Old Mar 24th 2012, 10:05 pm
  #2  
BE Forum Addict
 
Joined: Mar 2008
Location: Santa Cruz, CA
Posts: 4,896
md95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond reputemd95065 has a reputation beyond repute
Default Re: Transfering Pension from UK to US

Don't bother - just keep it in the UK - transferring it to the US is essentially impossible - anyone who tells you otherwise either doesn't know what they are talking about or is running some kind of scam to try and get their hands on your money.

There have been several recent threads on this topic which the forum "search" function should be able to find for you.

... and welcome to BritishExpats ...
md95065 is offline  
Old Mar 24th 2012, 10:24 pm
  #3  
Lost in BE Cyberspace
 
Joined: May 2010
Location: San Diego, California
Posts: 7,505
SanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond reputeSanDiegogirl has a reputation beyond repute
Default Re: Transfering Pension from UK to US

+1

Numerous questions on this topic over the years.

No-one has ever found a way to successfully and legally transfer a UK pension to the US.
SanDiegogirl is online now  
Old Mar 24th 2012, 11:59 pm
  #4  
Bob
BE Site Lead
 
Bob's Avatar
 
Joined: Aug 2004
Location: MA, USA
Posts: 91,773
Bob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond repute
Default Re: Transfering Pension from UK to US

Don't bother.

The tax hit wipes the whole point of the pension scheme out.

QROPS, the theoretical method of doing this doesn't actually work for the US and for those people say they can do it, they're essentially holding the money in a third party country, doing something dodgy for filing requirements and taking a mega slice of your pie, where they won't even be interested in it unless there's several hundred k involved. And again, it's dodgy and doesn't work.

Just suck it up that IRS tax filing will be a pain in the bum and get on with things

Oh yeah, and welcome to BE
Bob is offline  
Old Mar 25th 2012, 10:19 pm
  #5  
Just Joined
Thread Starter
 
Joined: Mar 2012
Posts: 2
Geoff_Spence is an unknown quantity at this point
Question Re: Transfering Pension from UK to US

Thanks for the welcomes & suggestions! It seems best just to leave it in the UK then... Not really sure how it all works. Can I just leave it for the next 40+ years until it starts paying out and then figure a way out to get the money over here (or wherever I end up retiring)?
Geoff_Spence is offline  
Old Mar 25th 2012, 10:26 pm
  #6  
Bob
BE Site Lead
 
Bob's Avatar
 
Joined: Aug 2004
Location: MA, USA
Posts: 91,773
Bob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond repute
Default Re: Transfering Pension from UK to US

Originally Posted by Geoff_Spence View Post
Thanks for the welcomes & suggestions! It seems best just to leave it in the UK then... Not really sure how it all works. Can I just leave it for the next 40+ years until it starts paying out and then figure a way out to get the money over here (or wherever I end up retiring)?
Yes.
Bob is offline  
Old Mar 26th 2012, 1:32 am
  #7  
nun
BE Forum Addict
 
nun's Avatar
 
Joined: Aug 2004
Posts: 4,722
nun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond repute
Default Re: Transfering Pension from UK to US

Originally Posted by Geoff_Spence View Post
Thanks for the welcomes & suggestions! It seems best just to leave it in the UK then... Not really sure how it all works. Can I just leave it for the next 40+ years until it starts paying out and then figure a way out to get the money over here (or wherever I end up retiring)?
You cannot move a UK pension to the US so you should leave the pension in the UK, but you need to make sure you deal with it correctly on your US taxes. This may require filing the FATCA 8934 form and will certainly involve some application of the US/UK tax treaty. So what sort of pension is it? Is it an employer sponsored plan? Is it a final salary type of plan? Did you and your employer both contribute to it? and if so in what proportions? Is it a personal pension like a SIPP?

Most UK employer sponsored plans are seen as employee trusts by the IRS and you will be able to claim exemption from tax on any gains using form 8833 and applying the appropriate tax treaty exemption. If you are US resident or a US citizen when you come to take income out there's no need to file foreign trust forms and you just include the income on line 21 of your 1040. You should also make sure that no tax is withheld in the UK by filing a US-individual-2002 form and an 8802 with the IRS.

If it's a SIPP the situation is a lot more complex. Also do you have any ISAs or other UK investments, if so you must remember that any income and gains they generate are liable for US taxation

Last edited by nun; Mar 26th 2012 at 2:00 am.
nun is offline  
Old Mar 28th 2012, 1:15 am
  #8  
Forum Regular
 
Joined: Mar 2012
Posts: 75
branmin is an unknown quantity at this point
Default Re: Transfering Pension from UK to US

Originally Posted by nun View Post
You cannot move a UK pension to the US so you should leave the pension in the UK, but you need to make sure you deal with it correctly on your US taxes. This may require filing the FATCA 8934 form and will certainly involve some application of the US/UK tax treaty. So what sort of pension is it? Is it an employer sponsored plan? Is it a final salary type of plan? Did you and your employer both contribute to it? and if so in what proportions? Is it a personal pension like a SIPP?

Most UK employer sponsored plans are seen as employee trusts by the IRS and you will be able to claim exemption from tax on any gains using form 8833 and applying the appropriate tax treaty exemption. If you are US resident or a US citizen when you come to take income out there's no need to file foreign trust forms and you just include the income on line 21 of your 1040. You should also make sure that no tax is withheld in the UK by filing a US-individual-2002 form and an 8802 with the IRS.

If it's a SIPP the situation is a lot more complex. Also do you have any ISAs or other UK investments, if so you must remember that any income and gains they generate are liable for US taxation

Hi there, first post.

Was going to start a brand new thread but it seems this is a popular subject, so if I may, just let you know my situation. You already have answered what's mostly been on mind and that is transferring pensions over to the US and what with my fear of IFA's and scam artists, you have answered and confirmed my question.

Been in the states for 18 years and am a dual US and UK Citizen with an address in the UK. 2 Personal Pensions coming up in 4 months, small by normal standards but one is with Clerical Medical guaranteeing a 8% return and the other with Equitable life, a unit linked Policy.(neither are Sipps) I was thinking of taking the 25% tax free allowance and then a yearly pension on both, but it was suggested with Clerical Medical with that sort of return it's best to get a higher annual Pension, but the way I feel, what with the amount of scam artists around, dicky IFA's(sure there are some good ones around but where?) plus the Government in power at the time further reducing one's pension or even the Pension Provider going bust, I would just rather take the money and run(but open to all suggestions) Not being in the UK(perhaps once every three years) and relying on stable exchange rates and wire charges is not the best, but it is what it is. Someone suggested that I try and link the two Policies together and only possibly pay one set of annual charges..still unsure of what to do.

However, know it's been mentioned before but would appreciate a link to the IRS forms I would need to fill out and wondered if I would still have to pay tax in the US on the 25% allowance I am to receive and should I later fill out an HMRC form to have my pension paid tax free and therefore pay taxes in the US? Or not as the case might be as I presume I will be taxed on my UK pension? Thx very much.
branmin is offline  
Old Mar 28th 2012, 3:51 am
  #9  
nun
BE Forum Addict
 
nun's Avatar
 
Joined: Aug 2004
Posts: 4,722
nun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond repute
Default Re: Transfering Pension from UK to US

Originally Posted by branmin View Post
Hi there, first post.

Was going to start a brand new thread but it seems this is a popular subject, so if I may, just let you know my situation. You already have answered what's mostly been on mind and that is transferring pensions over to the US and what with my fear of IFA's and scam artists, you have answered and confirmed my question.

Been in the states for 18 years and am a dual US and UK Citizen with an address in the UK. 2 Personal Pensions coming up in 4 months, small by normal standards but one is with Clerical Medical guaranteeing a 8% return and the other with Equitable life, a unit linked Policy.(neither are Sipps) I was thinking of taking the 25% tax free allowance and then a yearly pension on both, but it was suggested with Clerical Medical with that sort of return it's best to get a higher annual Pension, but the way I feel, what with the amount of scam artists around, dicky IFA's(sure there are some good ones around but where?) plus the Government in power at the time further reducing one's pension or even the Pension Provider going bust, I would just rather take the money and run(but open to all suggestions) Not being in the UK(perhaps once every three years) and relying on stable exchange rates and wire charges is not the best, but it is what it is. Someone suggested that I try and link the two Policies together and only possibly pay one set of annual charges..still unsure of what to do.

However, know it's been mentioned before but would appreciate a link to the IRS forms I would need to fill out and wondered if I would still have to pay tax in the US on the 25% allowance I am to receive and should I later fill out an HMRC form to have my pension paid tax free and therefore pay taxes in the US? Or not as the case might be as I presume I will be taxed on my UK pension? Thx very much.
First I'm just an interested amateur, so please double check anything I say.

What is your residency status? you mention a UK address, this is vital to how you will be taxed. You need to find out if your UK pensions are recognized as pension schemes in the UK/US tax treaty. Generally if they are UK employer sponsored retirement plans where your employer made the majority of the contributions they will be pension schemes for tax treaty purposes, if not they will probably be treated by the IRS as foreign trusts. Your pension funds' status will determine if you have to file FBAR and or 8938 or 3520 or other forms. If the pensions are covered by the treaty any gains in them will be free of tax in the US until you take distributions and I recently read that you don't have to file 8833 and make a treaty claim in the case of pensions, but you could always still do it just to be safe.

As a US citizen the US will be tax your 25% UK tax free lump sum. If you are not resident in the UK you will not be taxed on your UK pensions as long as the Treaty is applicable. You need to file US-Individual-2002 with the IRS which they forward to HMRC to claim that tax treaty relief.
nun is offline  
Old Mar 28th 2012, 3:52 am
  #10  
Lost in BE Cyberspace
 
Boiler's Avatar
 
Joined: Mar 2004
Location: Colorado
Posts: 33,372
Boiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond reputeBoiler has a reputation beyond repute
Default Re: Transfering Pension from UK to US

FACTA did not seem to cover final salary schemes.
Boiler is offline  
Old Mar 28th 2012, 4:40 am
  #11  
Forum Regular
 
Joined: Mar 2012
Posts: 75
branmin is an unknown quantity at this point
Default Re: Transfering Pension from UK to US

Originally Posted by nun View Post
First I'm just an interested amateur, so please double check anything I say.

What is your residency status? you mention a UK address, this is vital to how you will be taxed. You need to find out if your UK pensions are recognized as pension schemes in the UK/US tax treaty. Generally if they are UK employer sponsored retirement plans where your employer made the majority of the contributions they will be pension schemes for tax treaty purposes, if not they will probably be treated by the IRS as foreign trusts. Your pension funds' status will determine if you have to file FBAR and or 8938 or 3520 or other forms. If the pensions are covered by the treaty any gains in them will be free of tax in the US until you take distributions and I recently read that you don't have to file 8833 and make a treaty claim in the case of pensions, but you could always still do it just to be safe.

As a US citizen the US will be tax your 25% UK tax free lump sum. If you are not resident in the UK you will not be taxed on your UK pensions as long as the Treaty is applicable. You need to file US-Individual-2002 with the IRS which they forward to HMRC to claim that tax treaty relief.
Thx Nun for your speedy reply. I am a US Resident. They are personal pensions, not employer related and I believe they are recognized covering the US/UK treaty, but not 100% sure on this. Considering taking the 25% tax free and receiving an annual pension. Could they come under a foreign trust? Also will be receiving monthly rental income into a Building Society Acct. As this will have to also be reported at years end, at what conversion rate(since it can dramatically change over the year) do I use, as this might not be in my favour, or do the IRS take a fixed average rate say 1.58 to the Pound. Obviously the rent is being paid in pounds and converted to Dollars for I presume tax purposes. As I mentioned previously though, this money is hardly convenient for me sitting in an account in the UK and wondering what benefits if at all would be opening up an offshore acct, say in the IOM? I still need to have it transferred over to a Bank Acct here.
I mentioned a UK address previously which confused you and I apologise, just somewhere I can go when in the UK. Thx for your help.
branmin is offline  
Old Mar 28th 2012, 11:37 am
  #12  
nun
BE Forum Addict
 
nun's Avatar
 
Joined: Aug 2004
Posts: 4,722
nun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond repute
Default Re: Transfering Pension from UK to US

Originally Posted by Boiler View Post
FACTA did not seem to cover final salary schemes.
FBAR isn't necessary for final salary schemes, but they come under FATCA (8938). See Q12 and Q13 here

http://www.irs.gov/businesses/corpor...255061,00.html

Last edited by nun; Mar 28th 2012 at 11:45 am.
nun is offline  
Old Mar 28th 2012, 11:44 am
  #13  
nun
BE Forum Addict
 
nun's Avatar
 
Joined: Aug 2004
Posts: 4,722
nun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond repute
Default Re: Transfering Pension from UK to US

Originally Posted by branmin View Post
Thx Nun for your speedy reply. I am a US Resident. They are personal pensions, not employer related and I believe they are recognized covering the US/UK treaty, but not 100% sure on this.
You must find out if they are covered. There is debate about whether UK personal pensions where you direct the investment of the money or make the
majority of the contributions are pension schemes under the treaty. Many advisers believe them to be foreign trusts.

As this will have to also be reported at years end, at what conversion rate(since it can dramatically change over the year) do I use, as this might not be in my favour, or do the IRS take a fixed average rate say 1.58 to the Pound.
The Treasury publishes a conversion rate to be used, just use Google to find out

As I mentioned previously though, this money is hardly convenient for me sitting in an account in the UK and wondering what benefits if at all would be opening up an offshore acct, say in the IOM? I still need to have it transferred over to a Bank Acct here.
I mentioned a UK address previously which confused you and I apologise, just somewhere I can go when in the UK. Thx for your help.
I don't think there's much benefit to having IOM accounts if you are a US citizen.
nun is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.