US Pension Goals utilizing British Pensions


Pensions are a simple concept, which unfortunately due to successive government changes, have become a complex area. When considering your US pension goals, and you hold british pensions, it is further complicated. Not only should the British pension be considered in planning, but also rules allowing for the transfer of British pensions to other countries. We provide FAQ about both the rules for the US and also the likely tax position.

When assisting you, we will first seek your “objectives” and carry out a review of your British and US pensions. We will seek to assist you in achieving your pension goals and, as part of that, we will carry out an investment review linked to your risk profile. We will take existing pension contracts, no matter how complex, and we will simplify them / consolidate them into one information point, and then we will provide an ongoing review service to ensure that you understand where you stand in comparison to your pension goals.

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2013
WINNER: PENSION PLANNER OF THE YEAR

Who should help you achieve your pension goals?

In our opinion, US persons with a UK pension need to choose an Advisor regulated in both the UK and registered with the SEC. Who else will be suitably licensed and qualified to advise on UK pensions to US residents?.

To be clear, we are very different from many advisers based outside the UK and the US who may or may not have any necessary UK regulated licenses, and have a limited range of SIPP providers and custodians available, and may insist the only solution is a Maltese QROPS – it isn’t!

Commissions and consequences

Where earnings are only linked to actions, then often the action ends up being recommended, even when that action is not in the best interests of the US person / client. There are taxation issues that a resident in the US needs to consider and there could be unpleasant tax consequences if the advisor is not up to the job. QROPS are not without danger, but then there are also issues of Lifetime Allowance, as well as the actual residency and domicility of those being advised; you may or may not be currently living in the US now and plan to live there, or alternatively you may be currently living in the US but plan to retire elsewhere. These are important considerations for advice on QROPS and SIPPs.

How are your pension goals best met?

The advisor will present their terms and conditions in writing before any advice is given and you will be asked to agree to a fee on completion. Transparency in the pensions process is imperative.

  1. A comprehensive review of all the existing pensions should be undertaken. This is best done by those with specialist UK pension qualifications and experience. After all,we are talking about UK pensions , some of which are extremely complex in nature
  2. An understanding of the clients needs in retirement is crucial as follows:
    • When will the client realistically want to retire?
    • On what level of income?
    • Where will the client retire?
    • What are the client’s succession plans?
  3. Projected cash-flows should identify if the client’s current plans are on target
  4. A comprehensive set of recommendations to demonstrate how to bridge any gap between the current arrangements and the required level of income.
  5. A recommendation as to whether the british pension is best left where it is, or indeed, if it should be transferred and to where – a QROPS or SIPP.
USA QROPS and British SIPPs

From 9th March 2017 a 25% Overseas Transfer Charge (OTC) was levied on transfers as they leave the UK if the investor is resident in the USA- making QROPS no longer a viable option. However, utilizing our service, the process may show a client that their pension goals can be met with the existing pensions in place- requiring no action! However, this is only likely to be explained to a client paying a fee for a service as against one paying commission that is only earnt with a recommendation to transfer.

Disclaimer

Aisa International is not licensed to give tax advice on pension transfer matters – nothing on this page or website should be construed as personal tax advice in the US but only as guidance on the questions you should be seeking answers to.

Consideration Options & Results

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Consideration Options & Results

Complete the fields below, then click next to find your target fund value.

Click next to find your target fund value.