British Expats - UK Pension

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Hi

I am Indian Citizen based in UK for the last 2 years and will be relocating to US - wanted to check if

1. We can transfer our UK Pension fund to US
2. What is the process to do the same
3. Is there any tax advantage/disadvantage
4. Any other benefits/loss of moving the same to US.

1. No
Other questions are moot

What Hotscot said. :nod:

Quote:

Originally Posted by Hotscot (Post 11509823)

1. No
Other questions are moot

Is this only for UK Pension to US or in general you cannot transfer UK Pension. Reason I ask I had relocated from UK To indian few years back and I was provided certain funds in India where I could transfer my UK funds.

Quote:

Originally Posted by Georgem4 (Post 11510250)

I believe you can.

Best speak to a pension provider and they can talk you through your options. The only problem with the US is the tax implications on pensions. You will probably be looking at something called QROPs.

George

QROPs for US residents have been explored and debated previously at length here on BE. NOBODY has ever reported actually finding a way to do it, nor identified anyone who has done. IIRC someone recently reported that it might be possible for a US resident to move a British pension fund to a Maltese QROP. Again, no examples of anyone actually doing it have been cited, and the high apparent costs of the Maltese QROPS makes it look like an unattractive idea anyway.

Quote:

Originally Posted by Georgem4 (Post 11510285)

OK. Well nj29536, speak to a pension person. They will give you the exact rules and what you can and can't do and make sure they are regulated and authorised by the FCA.

Advisors who are familiar with British pensions and the intricacies of US tax law are like hens teeth. Given that there isn't any positive value to be gained by expatriating a British pension it simply isn't worth paying the fees to get the advice. You will never end up financially ahead.

Quote:

Originally Posted by nj29536 (Post 11510141)

Generally it's the inability to transfer a pension to the U.S.

Quote:

Originally Posted by Pulaski (Post 11510269)

The IRS will not allow the transfer of a UK pension to a US qualified pensions scheme, so the answer to your first question (as everyone has already said) is an emphatic "NO".

It is entirely possible to move a UK pension to a QROPS set up somewhere other than the US, Malta is a popular location. There are possible UK tax advantages if you are a UK expat, but the costs and ongoing fees need to be assessed to see if the move is worthwhile. However, if you do the QROPS as a US resident the IRS will take an interest and may well see the transfer from the UK to another country as a US taxable event. This is debated with the QROPS companies claiming that the transfer is not US taxable. If you do the Maltese QROPS before you come to the US you will avoid the possibility of US tax on the transfer and you will then have to apply the US/Malta tax treaty or other strategies to deal with your US tax obligations on the pension.

If you are not planning to return to the UK there may well be a tax argument for a QROPS, but this is a complicated area and I am dubious about the fees associated with QROPS and it might be best for you to search out some expert advice.

Quote:

No. Nothing in Article 18(1) of the Treaty overrides the requirement that the distribution
must qualify as an “eligible rollover distribution” within the meaning of section 402(c)(4).

http://www.irs.gov/pub/irs-utl/am2008009.pdf

Quote:

1. No. The U.K. pension scheme is not an “eligible retirement plan” within the
meaning of section 402(c)(8)(B) of the Code, and nothing in Article 18(1) of the
Treaty overrides the requirement that a tax-deferred rollover distribution can be
made only to an eligible retirement plan.
2. Yes. A lump-sum transfer from a U.S. pension scheme to a U.K. pension
scheme that is not an eligible retirement plan is taxable in the United States as a
distribution pursuant to Article 17(2) of the Treaty.

http://www.irs.gov/pub/irs-wd/1231010.pdf