# US Tax implications: Transfer of Company Pension to a SIPP



## skoog154 (Apr 2, 2012)

Over the last few years I've built up quite a bit of equity in my employer sponsored pension in the UK. This is a standard defined contribution pension with an employer match denominated in GBP (much like a 401k). In US tax filings, I have been able to exclude the same contribution amount as one would exclude from a 401k in the USA (by US/UK tax treaty). Also, gains are not taxed by the US until distribution (by US/UK tax treaty). I think these pensions are a great savings opportunity for US expats in the UK!

I'm considering leaving the UK in the next year or so. I note that my current pension is denominated in GBP and this puts me at a currency risk after moving back to the USA. In the current pension I am unable to change currency to USD. Upon leaving the UK, I am thinking about transferring the entire balance to a Self Invested Pension Plan (SIPP) which I can denominate in USD. My questions are:

Will I still be able to defer US tax on gains in the SIPP until distribution? 

Will I have to file forms other than FBAR and 8938 just for having a SIPP (like 3520)?

Are there any other potential tax traps for US citizens regarding SIPPs?

Thanks,
Garrett


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## Joppa (Sep 7, 2009)

Post on Expat Tax - Expat Forum For People Moving Overseas And Living Abroad.


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## Bevdeforges (Nov 16, 2007)

Have taken the liberty of moving you over here to the Tax section. 

While I know virtually nothing about retirement investment plans in the UK, I'd go real slow on transferring the whole fund until and unless you find assurance that it won't have serious tax consequences.

I know I looked into transferring a US retirement fund to the rough equivalent here in France (primarily due to the currency conversion) and wound up deciding against it, due to the tax consequences. But with luck, we'll find someone here with some understanding of your UK options.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

What sort of investment options does that U.K. account provide?

If you're concerned about currency risk you could simply hedge against that risk directly and separately. That's easy and inexpensive to do nowadays in the options/futures market. But you might be worrying about a problem that doesn't actually exist (or substantially exist) depending on the holdings in that account.


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## jbr439 (Nov 17, 2013)

BBCWatcher said:


> ...
> If you're concerned about currency risk you could simply hedge against that risk directly and separately. That's easy and inexpensive to do nowadays in the options/futures market.
> ...


Any pointers (even basic ones) on how to go about doing this?

TIA


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## BBCWatcher (Dec 28, 2012)

There are a couple ways. One way is to short sell an exchange traded fund (ETF). To bet against the U.K. pound (i.e. to bet that the U.K. pound will decrease in value relative to the U.S. dollar) you would short sell either FXB or GBB (the two ETFs/ETNs for the U.K. pound). This is just like short selling a stock like Ford (F) or Apple (AAPL) -- same brokers, same way to trade.

That'd work. Do you feel like taking that bet? 

Back to the threshold question, though. I assume that account is not filled with 50 pound notes. What's in the account? Stocks (equities) in a wide variety of global multinational companies, for example? Those aren't going to be significantly sensitive to the pound-dollar exchange rate.


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