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UK SIPPS and US reporting

UK SIPPS and US reporting

Old Jun 24th 2021, 4:55 pm
  #1  
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Default UK SIPPS and US reporting

Dear All,

As many of you will know, one of the challenges moving to the USA is navigating one's way around the IRS reporting requirements for assets held overseas. A particularly thorny issue i are UK Sipps and if they come under the US Grantor Trust rules with CPA's divided on the subject. It gets more difficult as the 3520/A forms are relatively complicated and in my experience costly to prepare..
Whilst the CPA community are divided on if these forms are needed the penalties for non compliance are punitive at $10K or 5% of the fund size. The IRS issued a Revenue Procedure in 2020 which aimed to remove UK SIPPS from the filing requirement ( which to me indicates the IRS feel they were/ are in the Grantor Trust bucket.) The good news for many is if the SIPP has not had more than $50K a year contributed or $1M in total they are excluded and the IRS will refund eligible tax payers a refund of the penalties if levied.

The challenge for many like me who have transferred a DB scheme into a SIPP is how does one establish the contribution levels for DB pension ??? . I thought people would like to know that I have interacted with H and R Block Expat Tax and they are both knowledgable and also cost effective for 3520/A submissions at $350 per SIPP . I plan to go this route and continue to submit until it is clear my SIPP is excluded by the IRS.

Happy to answer any questions on my experiences moving a DB pension to a UK SIPP ( AJ Bell) and reporting via PM
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Old Jun 26th 2021, 8:27 am
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Default Re: UK SIPPS and US reporting

I think you are wise to be prudent. No-one thinks that Rev Proc 2020-17 applies to any UK pension plans at all. This is a current article on the position: https://www.ey.com/en_uk/ey-frank-hi...ent-in-the-us. Don't overlook that the transfer between plans is itself reported on Form 1040.

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