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UK SIPP that works for US resident?

UK SIPP that works for US resident?

Old Mar 26th 2021, 5:07 pm
  #16  
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Default Re: UK SIPP that works for US resident?

Originally Posted by TerryGoX
I have a defined contribution pension that has bounced around many pension companies in the UK as they each exited the market so I have never been confident in the money. Now, it looks ok and plan to move to ExpatSipp or AJBell but I have never filed FBAR paperwork (my oversight - nevr knew I had to prior to any distribution). Is there a Mia Culpe process with IRS - any one have experience?
It is not the IRS but the Treasury Financial Crimes Enforcement Network: https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html
On the dropdown menu on the first page there are options for late filing. I believe one says something like "I didn't know I had to file". Just go ahead and complete it and use that reason.

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Old Mar 26th 2021, 5:59 pm
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Default Re: UK SIPP that works for US resident?

I would only add that you should also file for prior years going back as far as the year ending 12/31/2015 or as many of those that apply. The reason is that the statute of limitations for FBARs is 6 years and filing those years will bring you into full compliance. The deadline for the year ending 12/31/2020 is April 15th, although you get an automatic extension until October 15th, but you might as well get on with it and move on with your life.
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Old Apr 14th 2021, 10:44 pm
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Default Re: UK SIPP that works for US resident?

I have been told by a Expat CPA firm that I can back file FINBAR 7 years and they say no penalties are expected. They have never known anyone that has been assessed for penalties if you just say "didn't know I had to" - they offered to file for $100 per year - is this prudent to show willingness to comply, the forms look simple just put off by the agency name - National Financial Crimes Agency
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Old Apr 15th 2021, 12:23 am
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Default Re: UK SIPP that works for US resident?

A handful of people have been assessed penalties for not filing FBARs but those are the big fish that were deliberately hiding extremely large sums of money, generally many millions, and those are the people that this whole process was designed to catch. To the best of my knowledge no regular Joe has ever been penalized on FBAR non compliance. All of the communications regarding severe penalties are accurate but they are at the discretion of the IRS and are mostly used as a tool penalize criminals, people deliberately hiding accounts and those who facilitate money laundering. But they are also used to ensure compliance by scaring everyone else to death. And it works. Many of the expat professional services reference these potential but unlikely penalties ad nauseum. Your CPA seems to one of the few good guys presenting a clear picture. You can back file FBARs for 6 years, 7 if you include the current year, with no penalty if you have declared and paid US tax on all foreign accounts. You can independently file current and prior year FBARs online at no cost very easily, it is a very simple form.

The real issue now is with Form 8938 that needs to be filed with your tax return if you meet the threshold. Foreign accounts, pensions, annuities, life insurance and just about any foreign financial investment must be declared (even if there is no current income) if the aggregate total of those accounts meets the filing threshold. There are similar penalties to the FBAR if you fail to file that form, and they are much more likely to be enforced. So you need to become compliant there as well if appropriate. If you are delinquent on Form 8938 then you can correct it by filing amended returns using the IRS Domestic Streamlined program, however, unless you can prove that you were non resident for at least one of the prior 3 years then they will penalize you by 5% of the maximum account value. Hopefully your defined contribution pension value did not trigger the need for Form 8938.
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Old Apr 15th 2021, 6:50 pm
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Default Re: UK SIPP that works for US resident?

My pension would have triggered the need for the form 8938 - it has been largely dormant for many years and stuck in a group policy. I have been resident in the US for 33 years and the pension has not been contributed to since that time.
Sounds like I have an issue, do I just assume the 5% penalty and get on with it or is it worth finding a suitable CPA that will do this for me, are they likely to do any better?
I really appreciate all your help
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Old Apr 16th 2021, 2:25 am
  #21  
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Default Re: UK SIPP that works for US resident?

Sent you a PM with details specific to you, but in short, and for others in the same situation.

It all depends upon how risk averse you are.

The first option is to fix the situation using the Streamlined Domestic Offshore Procedure, SDOP. They WILL penalize you 5% of the maximum value of your account, and you will likely have to pay someone to manage this process for you. However, it will give you immediate piece of mind that the matter is resolved.

The second option is to do the same thing outside of the SDOP which is an option provided by the IRS. https://www.irs.gov/individuals/inte...ion-procedures. It is basically the same process but the IRS reserves the right to apply the relevant penalties for failing to file Form 8938 (which the SDOP waives in return for the 5% penalty). The IRS may apply no penalty for a variety of reasons but they could potentially apply a penalty well in excess of the guaranteed 5% that comes with the SDOP

So you have to pick your poison.Go with the first option with a known cost and immediate piece of mind, or the second option an an unknown cost, possibly zero possibly a lot more and the uncertainty of knowing whether or not you have a penalty at all for up to the 3 years that they have to audit your amended returns.
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Old Jul 4th 2021, 12:55 pm
  #22  
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Default Re: UK SIPP that works for US resident?

Originally Posted by cranston
I use AJ Bell and they are very good.

Any questions please ask.
As this is a SIPP, are you able to invest in UK funds offered by AJBell and avoid any PFIC complications?
Or do you only invest in individual companies?
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