SIPPs & QROPS in the US
UK pensions cannot be transferred to a US scheme, however you do have options when considering how to manage international pensions like a SIPP or QROPS, especially if you are classed as a Non-Resident Alien (NRA).
Subject to obtaining tax advice, the following financial arrangements may be available to our NRA clients:
- International Pension Plans (IPPs)—both Regular Contributions and Single Contribution. “Toxic” assets held in PFICs can be transferred into an IPP, removing them from the additional “Toxic” tax charges and allowing tax-free growth.
- Bespoke US Self-Invested Personal Pension (SIPP)—when NRAs have deferred pension benefits in the UK.
- Management of existing QROPS pension
QROPS in the United States
In March 2017, the UK government imposed a 25% overseas tax charge on transfers to a QROPS if you are outside of the European Economic Area (EEA) or if the QROPS was based in a different jurisdiction to where you are resident. If you already transferred before this date, it´s not applicable.
SIPPs in the United States
In May 2010 the IRS released a document which has continued to be beneficial for clients who are considering a SIPP as the solution to the management of their existing international pension. The document says the following:
If an employer pension scheme in the United Kingdom and a SIPP are both pension schemes within the meaning of Article 3(1)(o), then a transfer of income earned by the employer pension scheme to the SIPP would not be a taxable event in the United States.
There is a double taxation agreement that exists between the UK and the US, which means you will not be taxed in both countries.
You should consult with your accountant before making any contributions to a pension plan outside of the United States while living or working in the United States. The United States tax code is complex. SJB US and Blacktower Financial Management (US) LLC do not provide tax or legal advice.
