PLIDSTER

Hi,

Currently in the UK but plan to be re locating to the USA within the next few years.
What is the best thing to do with any investments, bonds, and pensions that i have set up here in the UK? Can they be transferred? do i need to 'sell' them off or cash them in before moving? If UK pensions and investments (mutual funds provided by firms like Fidelity) can be transferred then to whom and how?

Im new to the forum and am not sure if this is the right place for this post.
Any help would be most appreciated.

Thanks

sir_eccles

Some tax free investments such as ISAs have specific rules for non-residents. Check the small print.

nun

If you become US tax resident you will have to comply with IRS regulations on foreign accounts......these are notoriously complicated. I'd recommend that you see a dual qualified tax specialist to work out how to organize things. terms you should research are:

FBAR - reporting of foreign accounts when agreegate is over $10k
FATCA - similar to FBAR and coming in soon
PFIC - IRS rules for tax on foreign mutual funds....so unit trusts etc.
UK/US tax treaty

There's no way to transfer UK based retirement/pension accounts to the US. My rule of thumb would be to sell as much of your UK investments as possible and move them to the US. Also don't forget to apply to pay voluntary NI contributions while your in the US

GeoffM

Qualifying Recognised Overseas Pension Schemes

Pension advisor told me this just today. Basically, either find a qualifying scheme and transfer, or leave your UK pot to grow while you're away. But you can't pay into a UK scheme from abroad, or so she said.

fatbrit

As it's less theoretical, I'd wager the Higgs Boson will be discovered well before you find any of these in the US.

GeoffM

Let's hope you didn't throw away too much money then. 15 listed on HMRC so yes rare but not non-existent.

fatbrit

Go for it! Let us know when one actually works for you. It's been the holy grail for many a year on this board. And nobody has found a solution yet.

GeoffM

I only heard about it today but she seemed to think it was a normal thing to do. I'm reading more about it now and, yes, it does seem quite tricky for the US - one quote of 7 months for the paperwork alone! So that does make me wonder whether it's worth it for only 10 years of contributions. Possibly better to have a separate plan in the US and leave the UK one to fester in my case.

I only mentioned QROPS as something for the OP to look at, since a later poster said it was not possible. Clearly it is possible but not necessarily easy.

Bob

QROPS, plenty of threads on that...be interesting to see if something changes...generally not a good thing except for a very small number of people, basically with no plans ever of returning to the UK or potential penalties kill any gains even if you could get it sorted apparently.

GeoffM

Yes, I eventually found a US-specific thread where people had said they'd successfully done it - but then others questioning the legality or worthiness of doing so. For my financially-simple brain I think my pension is best left where it is!

Keith S

I'm going to be somewhat in the same position in a couple of months when I arrive in the US for permanent residency. Just retired and have all pension investments in Australian Superannuation account which I believe would be best liquidated and transferred into a similar account in the US. Especially with the current favourable exchange rate. So the question is, what facility could I use and where can I find a dual qualified tax specialist. I will be living initially in San Antonio.

nun

IRS does not recognize any QROP plans. People may have moved their UK pensions to a QROP, but do they the go on to describe how the IRS treated them?

If you have funds in a foreign pension it's best left where it is and start reading the applicable tax treaty and rules for US residents having accounts overseas. I'm not sure of the situation for Australia, but for the UK there are specific rules for basic state pension and other forms of retirement plans.

nun

I don't know about UK pensions, but you can pay you NI from abroad and at a much reduced rate!

In the US if you meet the income requirements ROTH IRAs are good as you pay tax before you put the money in and then it grows tax free and withdrawals are tax free in US and UK!

Also 401k etc are well covered by the US/UK tax treaty

fatbrit

Your pension adviser probably needs to go.

As others have explained, there may indeed be theoretical QROPS. However, I know of nobody who has managed to transfer a UK pension into a US pension without getting clobbered by the IRS.

Keith S

"Clobbered by the IRS" is not exactly the welcome I'd want to hear about the transfer of my investments. Can't i just liquidate the existing fund and whack a lump sum into a Roth IRA or 401K and continue to draw an annual amount (pension) without too much of a hit?