IRS Reporting of United Kingdom Retirement
The IRS reporting of United Kingdom retirement for FBAR & FATCA is less complicated than the tax rules, but still unnecessarily complex.
The IRS general rule is that you have to report foreign retirement on the FBAR (Foreign Bank and Financial Account Reporting aka FinCEN Form 114) and FATCA (Foreign Account Tax Compliance Act).
More specifically, you report your Foreign Pension on a variety of different forms (facts and circumstances depending) such as a
Here is a basic summary of the IRS reporting of United Kingdom retirement for FBAR. & FATCA:
Most U.K. Pension Plans are reportable on the FBAR as a Foreign Bank and Financial Account.
The value is exchanged into USD. If the plan is a defined benefit plan, with no surrender value other than the received distributions, the FBAR value is zero, until the filer begins to take distributions.
Once distributions are taken, the value will change accordingly.
As with the FBAR, U.K. Pension Plans are reportable on FATCA Form 8938 as an asset. Depending on the type of retirement will determine how it is reported on the 8938.
Like the FBAR, the value is exchanged into USD.
If the plan is a defined benefit plan, with no surrender value other than the received distributions, the FBAR value is zero, until the filer begins to take distributions. Once distributions are taken, the value will change accordingly
Unfortunately, this is a term that is thrown around loosely by tax professionals who have no idea what it means.
A PFIC is a Passive Foreign Investment Company. Not every foreign retirement plan will be considered a PFIC. In fact, the majority of them will not be a PFIC.
But, if it is a private pension plan in which there were no employer contributions and the investment is made into a mutual fund (or several funds), the PFIC rules may come into play.
IRS Compliance – What Happens if I do not Report?
The IRS has the right to issue various monetary penalties, and has various tools at its disposal to enforce the judgment. Taxpayers can avoid these harsh outcomes with offshore voluntary disclosure.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.
Each case is led by a Board-Certified Tax Law Specialist with 20 years of experience, and the entire matter (tax and legal) is handled by our team, in-house.
*Please beware of copycat tax and law firms misleading the public about their credentials and experience.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced Form 8938 Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
Interested in Learning More about Golding & Golding?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting complian