# UK endowment policy when I move to the US



## NewBritInTX (Dec 7, 2019)

Hi Everyone,

My family and I are planning to move to the US in a few months, and I'd appreciate any advice about the tax implications for our endowment policy. 

It's due to mature in about 4 years, and obviously there will be no UK tax on the payout. Am I correct that there will also be no tax payable in the US? 

Many thanks indeed in advance for your help, it's greatly appreciated. 

Warm regards


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## JustLurking (Mar 25, 2015)

NewBritInTX said:


> It's due to mature in about 4 years, and obviously there will be no UK tax on the payout. Am I correct that there will also be no tax payable in the US?


You are probably not correct. It is very likely that US tax will be due, potentially annually across all the years in which you are a 'US person for tax purposes', along with painful FBAR and form 8938 reporting.

It's an open question though as to how you would actually handle or report this for US tax. As ever, the IRS has produced nothing but an echoing void in terms of guidance for this case, leaving you and anyone else in the same situation to try to muddle through alone. These approaches are suggestions, though just some of several:

https://talk.uk-yankee.com/index.php?topic=76841.msg1046699#msg1046699
https://www.taxationweb.co.uk/forum/endowment-policy-taxable-in-us-t16098.html

As you are starting to discover, nothing whatsoever about US tax is clear when it comes to non-US investments. Despite lack of clarity, failure to "properly" report foreign accounts (where "properly" remains entirely undefined) comes with penalties on the order of $10k or half your account balance. Unreasonable, of course, but that's US tax for you.


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## NewBritInTX (Dec 7, 2019)

Really helpful, thanks very much indeed


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