What can an American do with UK pensions?

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7om
7om Member Posts: 2 Level 2
edited January 15 in General

I am an American who spent 23 years in the UK. From that time, I possess a state pension and a couple of tiny private pensions. These pensions are paid into a UK bank account. Some of the money from these pensions is spent in the UK when I visit old friends once a year.

My UK bank told me recently that they would soon shut down accounts for people who no longer live in the UK. I need to decide what to do with this money. Recently, I moved a few thousand pounds to a Wise account. I plan to change most of that to US funds. It has been recommended that I transfer the bulk of my UK savings (<50k) to a US account.

What happens if I transfer more than $10k worth of my savings to the US? Also, any advice as to how I should proceed if I want my UK pensions paid into a US bank? I don’t need to do that. I could just have it paid into my Wise account. It doesn’t make any interest there, but it makes so little interest in my UK account that it doesn’t really make much difference.

Answers

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 247
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    Hi 7om,

    Most of your questions are out of the scope of what we can answer as a FreeTaxUSA agent and I am unable to advise you, however, community members are welcome to chime in.

    I recommend you speak with a financial retirement administrator. He or she may have some really good options for you! For example, rolling over amounts from your foreign pension to a USA based IRA.

    One thing that did catch my attention is you do have a reporting requirement for a Statement of Foreign Financial Assets. Here are the requirements:

    You may need to attach Form 8938 to your tax return to report your foreign financial assets such as foreign bank accounts or foreign stocks to the IRS if:

    • You are unmarried and you owned foreign financial assets of more than $50,000 on the last day of the year or more than $75,000 at any time during the year.
    • You are married filing jointly and you owned foreign financial assets of more than $100,000 on the last day of the year or more than $150,000 at any time during the year.

  • 7om
    7om Member Posts: 2 Level 2
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    I filled in the Form 8939 last year. Hopefully, there are community members with a similar situation. Expat Brits might have some sage advice.

    Thank you for replying.