Author Topic: SIPP/citizenship/tax advice for US citizen in UK  (Read 959 times)

London Moustache

  • 5 O'Clock Shadow
  • *
  • Posts: 5
SIPP/citizenship/tax advice for US citizen in UK
« on: May 08, 2020, 02:55:49 AM »
Hello all!

I am a US citizen living in the UK. I have been awareded UK citizenship, but haven't made it "official" with a ceremony yet due to Covid19. Can anyone help me with the following?

1) SIPP. Any providers recommended that will accept US citizens? I actually have a SIPP already but am unhappy with my provider. If no other providers will accept me, is there a strategy to transfer the SIPP to another type of retirement fund?

2) Renouncing US citizenship. Due to the cost/hassle of filing US tax returns, as well as generally being a pariah when it comes to financial accounts like SIPPs, I have considered this. Any advice?

3) Remittance basis. Does anyone know if there is some sort of tax limit on the tax liability on unremitted funds? I have US savings that I want to remit to the UK at some point. Any other general advice?

Thanks!

gldms

  • 5 O'Clock Shadow
  • *
  • Posts: 27
  • Location: UK
  • US Expat in UK
Re: SIPP/citizenship/tax advice for US citizen in UK
« Reply #1 on: May 08, 2020, 05:20:49 AM »
If you have already lived here (UK) long enough to qualify for citizenship, then you are taxed on the arising basis, not the remittance basis. You don’t pay tax on money just because you had it stashed in the USA and now you bring to the uk; however, you were supposed to report and pay tax on any earnings (capital gains and dividends) from that money via self-assessment unless it was in an IRA or US 401k.  You were also supposed to report any other foreign (US) earnings to HMRC. You still get a capital gains allowance and also a dividend allowance.

Some people might advise you to avoid a SIPP until you renounce your US citizenship because they think a SIPP would be classed as a Foreign Grantor Trust and  cause enormous US tax headaches.  Others argue that  that interpretation is silly.  However, you have to settle up with the IRS  when you renounce so I would try to keep things simple until then.  Make sure you are 100% up-to-date with all your US tax filings and FinCin (FBAR) disclosures.

shelivesthedream

  • Walrus Stache
  • *******
  • Posts: 6744
  • Location: London, UK
Re: SIPP/citizenship/tax advice for US citizen in UK
« Reply #2 on: May 11, 2020, 01:23:43 PM »

Kwill

  • Handlebar Stache
  • *****
  • Posts: 2331
Re: SIPP/citizenship/tax advice for US citizen in UK
« Reply #3 on: May 11, 2020, 02:12:09 PM »
I don't know about the rest of it, but why don't you wait until after a couple years after the Brexit transition period and the pandemic before renouncing any citizenships? It just feels like a good time to keep one's options open, even if it means doing a bit of extra paperwork for a few years.

 

Wow, a phone plan for fifteen bucks!