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I've got a UK SIPP retirement account from being an expat working in the UK for 5+ years for an affiliate of a US employer. As I try to decide how long I'm going to stay in the UK, it occurred to me to wonder if it is possible to rollover the money in the SIPP (in kind or in specie would be preferable, but I'd settle for a cash move) to a US IRA account or US employer 401k.

The UK SIPP holds only cash and shares (stocks to those in the US) traded on the LSE, or other major European exchanges. No UK-only mutual funds or OIECs or any of that.

If I can do a rollover, what sort of tax consequences might there be? Will it be a non-taxable event, like a direct rollover?

NOTE: There are both UK and US taxation issues in play here. Thanks to Ganesh for drawing my attention to the UK side, which I admit I was neglecting to think about previously.

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Just addressing the sending side: you should be able to make the transfer out of the UK tax-free, if you transfer to a "Recognised Overseas Pension Scheme" (ROPS).

These were formerly called QROPS ("Qualifying...") and a lot of online resources will talk about those. The basic idea is that as long as the overseas pension scheme guarantees to follow broadly similar rules to the UK system - e.g. not allowing you to withdraw your money before retirement age - then you can transfer to it.

There's a list of these schemes on the HMRC website, but in theory you still have to check for yourself that they actually follow the relevant rules. I'm not sure how to do that in practice.

There are only two USA providers listed, which suggests that transferring there isn't actually very common. The Wikipedia page suggests that in practice most people transfer to a scheme in a low-tax place like Gibraltar, rather than where they actually move to.

I suspect that any move will be quite expensive in fees, and from your own answer it seems the USA won't recognise it as a transfer in anyway.

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  • Thanks for the HMRC website link and clarification on ROPS vs the old name of QROPS. However, the answer is dependent on both UK and US taxation so this is only one-side of the equation. – davmp Aug 5 '16 at 13:19
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After more searching for how the US might treat such an attempt to "rollover" the funds, I found this: https://www.irs.gov/pub/irs-utl/am2008009.pdf

So, it seems it is impossible to do without US tax consequences.

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  • I guess that explains why transferring to the US isn't very common! Sounds like you should just keep it in the UK, as that note seems to make it clear you get to keep the tax benefits if you do. – GS - Apologise to Monica Aug 5 '16 at 13:26
  • Agreed. And that's what I'll be doing until and unless the tax treaty is updated to note specifically that rollovers are allowed without US tax consequences. – davmp Aug 5 '16 at 13:35

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