freddie_freeloader

Hi all

I have been in the US for 8 years am on a green card. I have a stakeholder pension with a major UK pension fund as well as an opted out second pension. The total is <GBP100K

1) Can I transfer this to a SIPP in the UK if I am a non-resident?

2) Can I transfer this to another UK provider (non-sipp)?

3) What is lowest cost provider of Qrops for US resident? I am obsessed with fees (more accuratly not paying them)?

Thanks

Arb

MidAtlantic

1. Yes you can transfer to a SIPP. Watch out for exit charges from the current provider.

2. Yes you can transfer to another UK provider.

But both answers are subject to finding a SIPP provider who will accept a US resident. Many will not. The only one I am aware of is AJ Bell. I am in the process of moving two small stakeholder pensions to them.

3. I have no knowledge of QROPS except that their charges are normally excessive!

Owen778

If you are a US resident, don't bother with QROPS, just leave your pension in the UK.

There are several old posts about it that you can find using the forum search. I may misremember, but I think when you read them you'll find that QROPS transfer fees and/or the fees for the new investments themselves are usually very high, and general opinion is that the transfer between the UK and Malta (usually) is considered a taxable event by the US.

This is denied by one company who keeps cold-calling expats or contacting them on LinkedIn. This happens so often that the company's name is automatically blocked by this forum. If you have been contacted by a company about this, steer far away from them.

nun

I agree with this. Avoid QROPS if you are a US resident, whatever the companies that run them say.

As to moving your UK pension to another UK provider, in theory that should be simple. Unfortunately the UK companies don't understand that the money is yours and not theirs so they will put hurdles like fees in your way. Also there is the difficulty of getting a UK provider to open an account for a US resident.

It's annyoing if you are use to the freedoms and zero cost you have with 401k and ISA rollovers.

Cook_County

One assumes that you have already been reporting the 2 existing plans every year on your FBARs and 8938s. The new SIPP will be reported there as well. The complete distribution of the existing plans may trigger a US taxable event; you will have to review the US/UK tax treaty and decide if in your view there is a taxable event in the US. Separately the new SIPP would arguably be a foreign grantor trust requiring annual filing of Forms 33520 and 3520-A. You will have to reach your own view on the risks relating to this.

Asg123

I don't know how things are now but this is what happened when I enquired about moving my UK personal pension to a US pension about 5 years ago: they said the US provider had to be on the qrops list, and if it wasn't on the list, I could ask them to apply to be put on the list. There were only a few on the US list, one of them was Fidelity, I phoned them and asked if I could open an IRA with them and move my UK pension to it, they said no but if I had an active 401-K with them they would do it. But my 401k was with another provider, so I asked my provider if they could be added to the listing so I could move my pension over, they said they would look into it and get back to me, but they never did, and I didn't pursue it as the rules changed so now (at my age) I can make withdrawals from my pension as I wish. So based on my experience from 5 years ago (of course things may have changed) you might check if your 401k provider is on the qrops list, and if not you could ask them to apply to be put on the listing so you can move your pension over.

Alan17

I'd never heard that before. My new company is transferring its 401K to Fidelity next year so I did a quick check to see if they're still on the list - unfortunately not. Only "ABL/Shirley MacKay Solo 401 K Pension Plan" and "Isabelle Je Dunne Contributory IRA" are listed.

I wonder if anyone has successfully managed to do a transfer to the US?

Cook_County

It is impossible to transfer from a non-US qualified plan into a qualified US plan. Just because HMRC have been sent a bunch of documents once does not mean that a US plan administrator would or could accept a rollover request.

nun

This is true.....there's no way to do a tax free transfer of UK tax deferred pension money to the US. You can only rollover US qualified plans and bey definition that rules out anything from outside the US.

If you transfer between UK pension funds that are recognized as such under the treaty then there is no taxable event if you have been claiming tax deferral under the treaty. Also if you have been treating the UK pension as a foreign grantor trust and using excess FTC to pay the tax on the money that goes in and any gains then there will be no US tax due as you'll have a tax free US basis.

Neillc37

How do you get to the point of declaring the SIPP a foreign trust when the primary requirement is that there needs to be a fiduciary who protects and conserves the money? Since it's self directed that doesn't seem to be the case.
The same argument is advanced by tax pros to declare the ISA is not a trust.

nun

This is always the difficulty. You have to look at the structure of the accounts and try to see how they fit into the IRS code and there is lots of room for interpretation.

Cook_County

Agreed. The reason for reporting is that it is gray (or grey in British English). The question has not come before a Court yet, but if it did and the IRS tried to collect the penalties set out in statute the IRS could bankrupt us all. It is a belt & suspenders (belt & braces) approach suggested to minimise risk.

Neillc37

Aren't you opening yourself up to a world of hurt by saying you have a trust anyway? For example is your SIPP going to file 3520-A with the IRS because they have a US person owner? The cure would seem worse than the disease.
The IRS definition of a trust is that there has to be a fiduciary who conserves or protects the assets. If you're investing in funds or stocks etc yourself then there isn't a fiduciary.

Cook_County

So why would a Canadian RRSP be a foreign trust but not a SIPP?

Cook_County

http://www.frankhirth.com/wp-content...nning-Memo.pdf
Tax considerations for US citizens in the UK