As an investment adviser representative with Blacktower Financial Management (US), LLC, New York professional Bradley Hamilton delivers solutions to UK expatriates in the United States. Bradley Hamilton specializes in UK pension transfers to America,
This presents systemic obstacles. For starters, IRS rules prohibit tax-free transfers from pension plans outside the US into their domestic equivalents. A UK-defined benefit pension, for example, is not transferable by a non-resident alien or expat into a traditional IRA or 401(k) plan.
Before early 2017, one viable strategy for consolidating UK pensions involved transferring them into a Recognised Overseas Pension Scheme (ROPS). However, the UK has since amended the law to impose a charge of 25 percent on any transfer to a ROPS for a non- European Economic Area (EEA) resident. In practical terms, this means that US residents face a prohibitive charge on such transfers.
Today, the SIPP (Self-Invested Personal Pension) has largely supplanted ROPs among British expats living stateside. Actively managed, SIIPs provide a flexible way of managing one’s retirement portfolio and withdrawing funds in a tax-advantaged way upon age 55.
This presents systemic obstacles. For starters, IRS rules prohibit tax-free transfers from pension plans outside the US into their domestic equivalents. A UK-defined benefit pension, for example, is not transferable by a non-resident alien or expat into a traditional IRA or 401(k) plan.
Before early 2017, one viable strategy for consolidating UK pensions involved transferring them into a Recognised Overseas Pension Scheme (ROPS). However, the UK has since amended the law to impose a charge of 25 percent on any transfer to a ROPS for a non- European Economic Area (EEA) resident. In practical terms, this means that US residents face a prohibitive charge on such transfers.
Today, the SIPP (Self-Invested Personal Pension) has largely supplanted ROPs among British expats living stateside. Actively managed, SIIPs provide a flexible way of managing one’s retirement portfolio and withdrawing funds in a tax-advantaged way upon age 55.
