I'm a naturalized US citizen.

When I lived in the UK, as a British citizen, I amassed a small pension pot (about 50,000GBP).

Is there any way to get that money transferred to the US (into another pension), without losing a large portion of it to the UK government?

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Disclaimer: I am not a lawyer nor financial adviser. This is neither type of advice.

In theory it is possible, though there appear to be hurdles where the USA is the target country. According to Transferring to an overseas pension scheme on the HMRC website:

The overseas scheme you want to transfer your pension savings to must be a ‘qualifying recognised overseas pension scheme’ (QROPS). It’s up to you to check this with the overseas scheme or your UK pension provider or adviser.

If it’s not a QROPS scheme, your UK pension scheme may refuse to make the transfer, or you’ll have to pay at least 40% tax on the transfer.

Qualifying Recognised Overseas Pension Scheme on Wikipedia says:

The critical issue in deciding how a QROPS is taxed internally on funds, and on payout, would be the double tax treaty between the country of residence of the beneficial owner (the pensioner or beneficiary) and the jurisdiction where the pension is based. Taxation can be affected by whether the country of residence of the beneficial owner recognises trusts or contract based pensions.

But further down that page, under Concerns about QROPS transfers for US residents it notes, among other concerns:

There have been increasing concerns about using QROPS for residents of the USA since 2013. Several IRS enquiries have led to many US accountants, as well as UK / US pension experts, ruling such transfers out. It has also led to the receiving QROPS trustees asking beneficial owners (the pension holders) resident in the USA to sign waivers absolving the QROPS trustees of all liability, as the transfer of UK pensions to third-party countries like Malta, Gibraltar and the Isle of Man are not considered as eligible rollover distributions. The IRS has made it clear that such transfers could be taxable.

The HMRC page Check the recognised overseas pension schemes notification list, as of the 1st November 2018 update only lists two entries, but note, the lists consists of:

[...] pension schemes that have told HMRC that they meet the conditions to be a ROPS and have asked to be included on the list.

so there may be other schemes that qualify but have not asked HMRC to be included on that list.


In short, it may be possible, but the USA as a target destination appears problematic. As it says on the HMRC page:

HMRC cannot guarantee these are ROPS or that any transfers to them will be free of UK tax. It’s your responsibility to find out if you have to pay tax on any transfer of pension savings.

and

You should seek suitable professional advice, including from a regulated financial adviser.

Under the new pension freedoms you can draw the capital out of your pension,so an option may be to draw it quickly (after you reach retirement age e.g 55) then reinvest in your USA fund.

There is also the 25% tax free lump sum, which you could draw and reinvest

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