US Citizen looking for 401(k)/IRA equivalent

gglaze

My accountant is in the UK and primarily helps me with accounts and taxes for my PLC. I don't think he has any real experience with US tax, but he's quite good and he's been researching the matter for me.

But it sounds like this is your bread and butter - if you'd be interested in advising me on my situation, I'd probably like to take you up on that. If so, please send me a private message, or email me at gglaze (at) gmail (dot) com.

Thanks!

coffee_geek_2

Cook_County,

Funds in SIPPs are PFICs? Please God, no.

I could barely find anything on the subject on the Web (20 minutes research), except a whitepaper about pensions and SIPPs for US persons living in the UK (and non-US persons as well).

Turns out there is an uncertainty as to how the SIPP is treated by IRS. If mostly employee-based, it *could* be treated as Foreign Grantor Trust (instead of Foreign Pension), which would imply the investment funds inside would be considered PFICs, which of course is beyond the frontiers of the horrible IMHO. Unless if one can find a SIPP with US investment vehicles, but does that even exist for the common man?

On what strong basis can you say the IRS will consider them Foreign Grantor Trusts and not Foreign Pensions?

Many thanks in anticipation

jamesd

gglaze, for completeness, the ISA is the UK equivalent of the Roth IRA, but with immediate access to the funds at all times. ISAs are not pensions, this is just a description of their approximate equivalent tax wrapper: after tax money buying, no further UK tax on withdrawing.

I've no idea how this is treated by US tax law but "badly" is likely to be a close approximation.

coffee_geek_2

Jamesd,

I haven't verified in the texts of laws but I have read in several places that ISAs are not except from US taxation. Roth IRAs are, however, exempt from UK taxation (they are mentioned in the Tax Treaty, or maybe I am thiking of a treaty with another country).

Cook_County

coffee_geek wrote: »

Jamesd,

I haven't verified in the texts of laws but I have read in several places that ISAs are not except from US taxation. Roth IRAs are, however, exempt from UK taxation (they are mentioned in the Tax Treaty, or maybe I am thiking of a treaty with another country).

Roth IRAs are not entirely exempt from UK tax. Withdrawals are exempt from UK tax to the same extent as exempt from UK tax but only if the treaty exemption is claimed on the UK return.

It may be cheaper in some circumstances however to waive the treaty if - say - one has lost money.

coffee_geek_2

Cook_County,

Waive the treaty? I suppose if you had lost money and withdrew, you wouldn't need to report in the first place?

BTW have you seen my private message to you? Cheers.

corporateconsulting

We have a provider of US compliant deferred anuities who may be worth talking to as this can accept US funds and set you up with a "pot" where there is no more US reporting. I am no expert in this field, but do have a lot of contacts in this organisation. Do you want their contact details?

Cook_County

corporateconsulting wrote: »

We have a provider of US compliant deferred anuities who may be worth talking to as this can accept US funds and set you up with a "pot" where there is no more US reporting. I am no expert in this field, but do have a lot of contacts in this organisation. Do you want their contact details?

US reporting is sadly not eliminated but there is deferral of the tax - but with the additional costs of the product on top of the SIPP wrapper.

The product would need a UK opinion as well.