There are numerous internet sites offering US Expats with UK Pension Schemes advice about their options. However, we have real concerns about the use of “investment bond” wrappers and QROPS.
This is something that we at Tailormade Pensions have raised, particularly when it comes to advising US Expats with UK Pension Schemes, about transfers to third party countries- in particular Malta- Here
US Expats with UK Pension Schemes –Article
There was an interesting article published by David W. Powell (Principal in the Groom Law Group in Washington DC) about US Expats with UK Pension Schemes and I have highlighted some excerpts from this –
–US citizen would generally be subject to US tax upon all of his or her income on exercise, though potentially also have a tax credit for UK taxes paid.
-Availability of the tax credit for UK taxes in the US is not always assured.
– Also importantly, the US taxpayer holding UK stock options must not forget the Form 8938 when they file their US tax return even if they would not be taxable until exercise or later.
What about US Expats with UK Pension Schemes that are deferred (no longer contributing)?
Many US Expats with UK Pension Schemes have been advised to transfer to QROPS, which are in third party countries such as Malta.
Some international pension companies have warned about the effects of such transfers and this issue is raised again within the article by David Powell. While the situation with UK pensions and US expats seems pretty clear, this may not be the case if the pension is transferred from the UK.
Indeed, we have been publishing warnings about US Expats with UK Pension Schemes transferring to QROPS in Malta for the past 4 years and we contacted the IRS to obtain their views and we published our findings.
If US Expats with UK Pensions have been advised to transfer their pensions to non-UK pensions, it may be sensible to review the advice given and tax appropriate tax advice.
Furthermore, ensure that your financial adviser has the relevant UK and US (SEC) licences and that any cross border tax adviser is suitably experienced to advise.
We can assist US Expats with UK Pension Schemes and so feel free to contact us.
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
This article was published on 15th September 2017
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