# 401k



## Reynob (Feb 18, 2011)

Hi my company is exploring sending me to the UK as our business is growing and they need a consultant over there.

I have a couple of questions I am hoping people can help me with

1) In the US my company uses a PEO company to payroll us as we are only a small firm, the PEO company can not keep me on thier books if I am out of the country for 3 months which means I can no longer pay into my 401k plan. What are my options here.

2) In general terms when I move there seems to be some debate not helped by the above scenario of where my employment will actually sit, will I be employed by the UK entity or remain an employee of our US company. I am hoping the former as my employment is held with the employee leasing company here in the US and they are saying they cant keep me on thier books.

Can anyone shed some light on this please?


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## Bevdeforges (Nov 16, 2007)

Hi and welcome to the forum.

It sort of depends on just how long you're going to be working in the UK among other things, but if you'll be actually resident in the UK (say for 6 months or more), your company is going to have to get you a visa so you can legally live and work over there. Not sure about the 3 month cut-off thing for your company's payroll, but it sounds like it may have something to do with the terms for differentiating between a "business trip" and a genuine overseas transfer.

In any event, if you are going to be resident there, you will have to be paid by the company's UK entity, which means you'll be paying UK taxes on your salary. If you're living in the UK for a year or more, you will be eligible for the Overseas Earned Income Exclusion which means you won't pay US income taxes on your salary and you won't be able to contribute to your 401K or your IRA (if you have one) as contributions have to come from earned income taxable in the US.

First thing to establish then is just how long are you going to be working in the UK and to get the visa issue squared away. Chances are, the UK entity is going to have to initiate the visa process for you unless your company has some experience in transferring employees between countries.
Cheers,
Bev


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